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Who exactly is "They"? By my understanding, the X-box 360 Arcade is NOT backwards compatible, meaning it cannot play original x-box games. The only one i know of that can is the X-Box 360 elite.
Now then, if you go online to the X-box live Marketplace, they have quite a few original x-box games available for download, but you have to pay for them :( These downloaded versions WILL work with the 360 Arcade
It depends on the region, if you got it from the UK it will play PAL games, it's American it'll play NTSC game, there are some games though (Ghostbusters comes to my mind) that work on either though.
You got error code E44 now the arcades have problems with internal hard drive problems and will not play any movies with torrents witch all movies have torrents. Sorry if I didn't solve nothing, you can also try sending it in a let microsoft try the movies but I hope this gave you your answer you were looking for.
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