Jon, it is obvious from your posts that you are no fan of xbox and that is fine, but the fact remains that the xbox as it works now, is the same as it worked when 7 days was ported to it. To claim that this is somehow Microsoft's fault when it is the porting team that developed the game to work on the existing architecture and failed, that is rediculous. Sure, xbox has a crappy architecture but it had it when the game was developed, and the dev's knew what it was capable of. To claim it is Microsoft's fault and or responsibility is dishonest. If the game won't work right on xbox, don't port it, plain and simple.
By the same token, I am an xbox user, and though I have experienced numerous MD5 errors in the past year, they have dramatically reduced in number and the game seems more stable. Whether this is due to the updates or to the way I am playing now (completely shutting down every 1-1.5 hours and using the work around if I do have a crash.) I currently have more than 100 hours without a terrain rewrite and only a half dozen crashes all of which happened because I got lazy and didn't reset.
So, yes the problems we are experiencing on the xbox may well be due to the limited RAM, or limited save file or any one of a number of issues you point to, but that does not alleviate the problem, nor find a solution.
The tag the team uses to identify the terrain rewrite gives a hint of the cause. The MD5 algorithm is inherently flawed, especially when dealing with large amounts of data such as what we are dealing with here. There were other algorithms that could have been used that are capable of doing the same thing with less chance of collisions (if that is what we are dealing with). Add to that, every time I have restored from the cloud my file has been good, I tend to think this is not a Microsoft problem at all, but a MD5 algorith collision problem where invalid hashes are generated (duplicate hashes for more than one file or different hashes for two of the same file) I could be wrong, but then I am only guessing, as is everyone else.
This bug is, at best, very frustrating, and it is a 7dtd problem, not a Microsoft problem. After all, the game was ported to the console, the console wasn't built for the game.