Alex Abrecht, fry cook of all things Xbox 2 rumor, claims he spoke to a Microsoft employee over the weekend who confirmed that the Xbox 2 will sport a flash-based hard drive. While this could be cool and all, and allow for some fast level-loading, we’ll take this rumor with a big grain of salt. And some ketchup. The ex-TechTV guy may talk to people, but saying you talked to a Microsoft employee could mean the dude was a coder for a division on the other side of MS campus responsible for Windows widgets. Albrecht also claims the guy told him the Xbox 2 will play DVDs out of the box and will be seen this week at CES. Yay DVDs. We’ll be there and report back for ya.