with rapidly advancing technology, and the amount of money Nintendo have at the moment, I could see them release a new console 2010/2011 as a more advanced Wii (Wii HD) just the wii with the ability to output 720p or 1080p (up-scaling) much like the DSi.
and/or a fully fledged new console 2011/2012 that could outperform the PS360, for $250 US if you think it would need to cost more just look at the 360s current price point. With newer technology even today they could produce a more powerful console incorporating the tech found in AMDs new HD 5000 series etc. and as for storage as SSD become more popular and cheaper I could see Nintendo including 20GB of internal storage easily. the disc media is a strange one they could stick with DVD based disks (aprox 8.5GB) or move on to Blu-ray based media or just go multi-layer , keep in mind Nintendo have always used a proprietary format for their consoles.
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