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HappySqurriel said:

I think many people are seriously underestimating the kinds of performance gains Nintendo could make with their next console. If you look at GPUs available today and speculate what could be very low cost and low energy consumption at the end of 2011 (or later) and in ATI’s line-up the Radeon HD 5670, Radeon HD 5750 and Radeon HD 5770  may be viable candidates.

To use an example, the jump from the HD consoles to the next Nintendo platform could be similar to the jump from the Dreamcast to the Wii.

 

This isn’t to say that Nintendo will be pushing the limits, but it will be 6 or more years between the release of the XBox 360 and Nintendo’s next platform; and even a very low performance system built today could easily exceed the performance of the HD consoles.

Oh yeah, I'm not meaning to underplay what the Wii 2 spec will be... DC to Wii seems a pretty apt comparison, and I'd say PSP to 3DS isn't all that dissimilar.  They should be able to put together an impressive piece of kit for a pretty low cost by next year or 2012.