What Xbox 360 System Should I Purchase?

I've always been a PS3 kinda guy but have decided to go ahead and buy an Xbox 360, and eventually the Kinect. However, I know absolutely nothing about the Xbox but have heard about the "red light" problems and so I want to make sure I'm buying the right type of Xbox system. I see that the newest Xbox is in stores for $200. However, there's a lot of 120gb systems on Ebay and a lot of them say that they have a falcon chipset. Are the systems with a falcon chipset a newer version of the Xbox?Or should I be looking for something else? Ultimately, I want to know what I should look for/things to keep in mind when purchasing an Xbox. Plus, are all Xbox systems compatible with Kinect?