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LO has seen impressive sales. Tales has had a great start in Japan and fable 2 is still coming. How Fable 2 does will really decide if it was a success or not but I do know there has been increased rumblings in hardcore circles of people (who wouldn't have been interested otherwise) talking about buying and/or considering a purchase of the box, this especially came to a head when final fantasy went multi-platform.

This years lineup is quite diversified.

You've got the RPG's (no need to mention them)
The casual tittles (lips, viva 2, scene it etc)
some established franchises to keep existing owners happy (gears 2)
And the increasing relevance of the xbla games (one only needs to look at the sales of geometry wars 2 and braid to see how much more important that market segment is becoming). Plus castle crashers is yet to be released.

Microsoft has the games, the question is will it convince consumer this coming holiday season? I hope so, but if microsoft drops the price the consumer may not have a choice.