The 360 should have another 2-3 years of solid soft development support but whether the tail end of that support is in the vein of catering to current supportive owners, or catering to an expanded audience may largely be dependent upon the success or luke-warm reception of Natal.
As of right now, the Xbox has more or less tapped the majority of the core gaming audience it could hope to win over this generation after 4 years. Typically, past 3 years is when a console platform has to increasingly rely upon the non-core demographics to see any sort of significant expansion in hardware sales.
As for pricing, while the $199 Arcade was definitely a sales success for MS, but as most gamers acknowledge, it does fall a bit short of the full experience with its limited storage capabilities. If and when the standard Xbox (drop the "Elite" label already) ships with HDD at the same price should be the true indicator of whether the platform will ever hit critical mass sales to anything even approaching the last two PlayStations.
Offhand, I'd say unlikely barring the overwhelming success of Natal.
So maybe Mid-life is about where the 360 is, quite possibly over the hump, but with enough in store for the future to keep it relevant and viable as a primary gaming platform to millions of gamers.
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