Disney Infinity Fans

You could save up and upgrade to the 360S if you wanted to stay with a 360? Otherwise, find a bigger HDD (which may be more difficult, as you likely have the older one)...

250GB Slim console is about £170 from Amazon(I'd recommend going for a new console, over preowned), for example... You can easily get a Data Transfer Cable for about £12 from Amazon, to transfer all data over, so don't need to worry about losing anything... So yes, this option is about £180 altogether from Amazon... Or Game have some bundles starting at £200 for the same console, plus a couple of extra games too... ShopTo.net also have a few bundles as well...

You can also look for 120/250/320GB hard drives, but I don't think there are any sold by places I'd recommend (external sellers on Amazon, mostly, or eBay), so you could try this route, but it's kinda taking a risk with "will it, won't it work?".

Does this help at all?

I would get a new HDD off ebay to suit your Xbox and jump into Infinity as this is the cheapest option to get what you really want to do.
If your looking to get the most value for your dollar/pound then remember that there will be the next gen console for PS and Xbox at the end of this year or early next and the current models will be worth nothing.
Since they will be working fine as I don't believe your console will burst into flames when the next generations are released I don't even see the point to trading in, just save up for the next gen while your enjoying playing Infinity on your current console.

A pleasure, LiamA113 as I live to serve.

Just get a PS3

tbh, I would hold on to your 360 for as long as you can. Assuming that the "720" comes out in the holiday season this year, it will probably drop in price late next year, which is also when it will have more, better exclusives. And, all the issues that plague all consoles at launch will be ironed out. If you're really looking for a bargain, you can probably even get a preowned one. Of course- the choice is ultimately yours.