The stuff about the memory is 100% true. For development before 2009, you had to allocate a portion of the 360s 480MB of available ram (10MB for frame buffer & 32MB for the guide).
Halo 3 for instance only used 335MB for the game and would probably explain why Forza 3 is such a leap over Forza 2 and bodes well for future games.
As for the engine stuff, i'm dubious, sure they could be making their own killer engine (they do regardless for a number of titles) but for the most part, Unreal Engine 3, Tech4, Framework 1 & 2, plus pretty serious hintage that CryEngine 3 & Tech5 will perform better on 360 makes the need for it redundant and these have proven to excel as well as and above and beyond anything the PS3 has shown thus far and they're far cheaper to license.
