According to report from X3F, Guitar Hero IV (World Tour) will work with Rock Band drum and guitar for Xbox 360 at least.
So they saw that they can't compete with Rock Band 2, decided at least they could sell stand alone game to Rock Band owner. Smart move on their part because I would not touch IV unless it work with plastic instruments I already have.
Saw that they can't compete? How about saving the consumers some money and not forcing them to buy a 270 set again to play their game? You think activision is so stupid that they don't realize they'll get extra sales just from making the game compatible with Rock Band instruments?
Harmonix will make sure the same thing happens on their end if they know what's good for them and you can bet Guitar Hero IV will end up selling substantially more than Rock Band once again regardless of the quality you think Rock Band 2 has over GH IV. Saying they can't compete is a joke.