News: Microsoft Canada says yes, Microsoft USA says no.
UPDATE: We've been in contact with a rep from Microsoft and they've confirmed that the "Hard Drive Required" listing on Xbox.com Canada was a goof. Ninety Nine Nights will not require the hard drive.
Spotted this little tidbit at Kotaku, it seems that Microsoft Canada and Microsoft USA are confused as to whether Ninety-Nine Nights will require a hard drive or not.
The Canadian version of Xbox.com lists "Hard Drive Required" under the game's feature list. On the the other hand, Xbox.com USA lists the game requirement as a "Storage Device", AKA a memory card.
So who's right? Who knows. In Japan (where N3 has already been released), every Xbox 360 ships with a hard drive, so this is a non-issue. Of course, it could just be a simple screwup as both sites still list the release date as "TBD", even though Microsoft announced an August release for N3 a few weeks ago.
Either way, we'll find out for sure soon. But if it's true I think this is one more point in favor of the rumor that says MS will discontinue the Core System in the near-future.