The XSATA is an interesting product. To sum it up, it acts as a bridge between an Xbox 360 and its hard drive, with the ability to convert the SATA connection and convert it out to a USB port. This allows you to directly access the file system on the Xbox HDD, allowing for a "normal" viewing of the folder hierarchy. This means that data, including save games, movies, and really anything can be backed up to your computer's hard drive. The main use is to have a copy of your saved games in case a file gets corrupt or your HDD dies, although there are other uses, as I'll explain later.
The first impressions of the device are not very good. Physically, it is light, and rather simple looking, and getting it onto the Xbox is a hassle. It uses a few plastic tabs that connect where the HDD normally would go, and getting it on properly can take several minutes the first time you try it. Once it is on, you'll find that it adds about 1/3" to the width (or height) of your Xbox, and fitting right between the console and the HDD. If you use your Xbox horizontally, like I do, you'll find that the XSATA also protrudes about 1/16" on the top and bottom, and when laying flat on the table, your Xbox will actually rest on the device itself instead of on its rubberized feet. I've used the XSATA for almost a year now with no side effects, but it's still an uncomfortable observation. Note that because the XSATA is a physical device that connects to your 360, you must have your Xbox turned on and in close proximity to your PC to use it.
But once you get past the initial reactions, it gets better. Fuctionally, this device is flawless. The XSATA has a standard mini-USB port on the back, and comes with a 4 foot cable for connecting to your computer (could be longer, but...). The Xplorer 360 software that is included has worked fine for me, but I highly suggest doing a Google search for the latest version, which fixes some bugs and adds support for the 512MB memory card and the 120GB HDD. (The software works on Vista, too.)
Due to the limitations of the Xbox HDD, you can't access it with the Xbox and your PC at the same time, but that's not a major issue. The Xplorer 360 software is simplistic but functional. It only takes a few clicks to access a connected 360 HDD. It only takes a few more clicks to start the backup process, which creates a 20 GB (or 120 if you have the bigger HDD) image file which you can save anywhere you want. The backup process takes about 45 minutes on a USB 2.0 connection, and virtually ensures that your files up to that point are safe. I've never had to actually use an entire image restore before, but the process is painless to perform once about every month or so.
Those that have done any amount of hacking or soft/hard modding of the original Xbox will find themselves right at home viewing the file hierarchy of the 360. For others, though, there is a good sized learning curve. Microsoft makes use of unique hexadecimal strings for each game, and until you learn them or look them up, the entire system will just seem to be random files and folders.
But once you get past that, the XSATA becomes more useful. It is possible to extract and backup individual game saves, which is a much faster and more convenient process than backing up the entire drive. Even better, if you have a way of extracting or downloading game saves from original Xbox games, those can be injected into the appropriate place on the 360 HDD and played as long as the title is BC. This can save literally hundreds of hours of playtime if you don't want to spend time getting back to where you were. This is probably the most useful function of the XSATA, as transferring original Xbox saves is virtually impossible otherwise.
Functionality aside, there is a final fringe benefit to owning the XSATA. It has blue LEDs on the sides, which means that you'll have a gentle blue light on the side of your 360. No point whatsoever, but it does get you compliments, hehe.
The XSATA isn't for everyone. While anyone can go in and backup their entire drive, it takes a slightly more advanced user to get the full use out of it. There are the abovementioned problems with installation, but once you get past those, the XSATA is a useful device that may be worth it for the ability to transfer old Xbox saves alone.