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Maybe I'm not that creative, but right now it seems like making the 720 an upgraded 360 would make the most sense. The dashboard and live would be easy to port, it would be cheap to design and build, and it would give the devs more power. The dev kits would be relatively the same so next gen games could be turned out fast. The PS3 changing everything up and confusing developers really crippled it.

So really, they just have to wait until upgrading the components and paying a little more makes more sense then pumping out the same tech. It really should be a hardware driven decision, rather than just wait 6 years.