We KNOW M$ has been working on a smaller chipset to at least 45nm, but 32 nm isn't out of the question. I don't think M$ will launch a redesign 360, but they very well might, but it's going to be a cost condsideration move, imho. They are going to try to make the 360 manufacturing cost as cheap as possible to maintain their price points, if not reduce them drastically.