finally, someone else who has SUCCESFULLY softmodded a xbox..lol.
well i would *strongly* suggest buying a new harddrive, cuz do you REALLY want to buy a new dvdrom drive just so that you can read cd-r? or do you have another reason? your xbox can already read cd-rw, in case you didnt know, so i think you should go with the HDD
edit: UNLESS you meant dvd drive for your comp. then, that would make ALOT more sense. if you have a regular cdburner on your comp, then get your xbox a new HDD. but if your comp doesnt have a cdburner at all, get the dvd rw drive.