The game was reported to be very far along earlier this year (an Australian website even reported playing it on linked 360s). In my opinion the 360 version was put on hold after Sony made a deal with Epic to improve the performance of the PS3 version of Unreal Engine 3.
Look at it this way, the 360's version of UE3 never had the problems the PS3's did so developers working on that version of the game wouldn't have had the same delays waiting for UE3 to be optimized. Add to that the fact that PC and 360 game development is very similar.







