I have an older model 360 (not slim). I have heard that they require an additional power supply to work with the older models. Is this true? if so is it included or sold separately. I would hate to not be able to get it up and running xmas morning.
I did find this related question but it did not answer my specific question.
Yes you do need a power supply to run a Kinect on an Xbox Classic (on the newer ones there is an orange port which acts at the power supply).
Currently, all Kinect are sold with such a power supply.
While there is no guarantee this will be true going forward (or true if you buy on ebay); as part of their launch, Microsoft has been including the power supply with all Kinect products sold independently of an Xbox (if you buy one as part of a bundle all bets are off).
Example. Notice how, under product description, power supply is included.
