It's something to do with data that's stored on the HD to save loading screens and some of the 60GB HD's cause problems.. 360's can clear their cache (Sp) and it helps.

It's FAR FAR more technical than that.. but that's I understood lol

Edited to add: Thank fuck you didn't lose all your data, when I heard I was like SHITE I've been telling folk to erase their game saves