Halo 4's eye-catching multiplayer requires at least an 8GB USB flash drive or an Xbox 360 hard drive, Microsoft has confirmed.
For the "optimal experience", Microsoft "highly recommends" using a hard drive. Xbox 360 4GB, Arcade and Core models do not come with a hard drive built in. You'll have to buy one separately, if you haven't already done so.
On Xbox.com Microsoft suggests the pre-configured Xbox 360 USB flash drives by SanDisk, which come in 8GB and 16GB flavours and include Xbox 360 update software and room for your profile, game saves and digital gubbins. You can use other USB flash drives, but they must be configured as Xbox 360 memory units.
On the hard drive front, Microsoft suggests the Xbox 360 320GB media hard drive, which includes the full downloadable Lego Star Wars 3: The Clone Wars.
Microsoft's note, some five months before the release of Halo 4, is no doubt an attempt to avoid the complaints it received upon the launch of Halo: Reach, which surprised many by preventing Xbox 360 owners who didn't have a hard drive from playing the campaign cooperatively.