Nintendo will probably not be as worried about their next system failing, and I suspect that development cost increases will moderate mainly because most of the techniques needed to create games on Next Generation games are already in use on the PS3 and XBox 360 (obviously, in a more limited fashion)..
Nintendo should be able to (easily) produce a system that is 4 times as powerful as the PS3 or XBox 360 by 2009 using a 45nm process and then spend 2 years reducing the (eventual) manufacturing cost while improving the processing power and eventually release a system 8 times as powerful as either system for $200 to $300 in 2011..
The Wiimote will have matured, become far more ergonomic (they won't need to keep its remote control shape to prevent scaring non-gamers) and will probably have more advanced buttons (analogue trigger/buttons and potentially a couple of assemetric buttons in the place of the B button). The nunchuck will continue to have the existing functionality but Nintendo will also give it screen pointing capabilities.
