If it's essentially a new platform designed to compete with Apple TV or Roku, then even at $99, I'm not sure what the point of it would be as a new "lite" gaming platform. Maybe if it retained XBLA game compatibility, but again, those apps were coded for PPC architecture which means a lack of hardware compatibility.
No 360 software compatibility whatsoever means non-related new device/platform.
While that doesn't rule out a set top box controlled by "Kinect compatible with MS TV" games, I'm not sure exactly why this would mean anything to current Xbox owners who would presumably just want MS TV functionality added to their 360 before buying another $99 box to sit next to their Xbox, tethered or not.
Sounds like more info is needed before any legitimate guesses can really be made here.
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