You can store all your music on a USB stick drive and plug that into a usb port. You can stream Music from your computer over your network to the 360.
http://www.microsoft.com/windows/windowsmedia/knowledgecenter/howto/mp11/xbox360towmp11xp_stepbystep.aspx
you can also burn it onto CDs then rip them on the xbox 360.
http://www.gamespot.com/pages/forums/show_msgs.php?topic_id=26395382
unfortunately due to stupid DRM (digital rights management) you can't drag and drop music onto the 360 hard drive.
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