Considering its Nintendo, I dont think they will price their device higher then 299$ or sell at a loss. They need to stream and handle the controller, they have a new proprietary drive, the box is also small with very small vents. If we are talking about graphic, saying its on-par or bit better seems realistic to me. About the tech demo discussion, you can have a look on a tech demo "rendered by the PS3" in 2005:
http://www.youtube.com/watch?v=W9QbYWEd7AE
In any case, its not very important, Nintendo were successful doing their own thing. They are a couple gen ahead in terms of profit. If they price their console at a higher price or sell at a loss they can surely be a lot more powerful, but it wouldnt do them any good, PS3 proved that.
If you thought only resolution matter have a look at this:
http://www.youtube.com/watch?v=-B0i7sgk3Xo&feature=related
