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I agree with Microsoft not going Portable, I know handhelds sell a lot more but I still think the competition is too tough. Id buy one though!

My predicitons

Wii will become the highest selling home console ever.

Microsoft & Sony introduce their motion sensing products with their consoles, (I can see microsoft coming out with some super advance "Power Glove")

No clear winner this gen. Sony will have hopefully learnt from their mistakes, Microsoft will be in its third gen and IMO will only get better, Nintendo have a big advantage going into the next gen so long as they don't screw it up ala PS3.