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I just don't see any space in the industry for another company to make a home console. Apple dominates the mobile gaming area, and Valve arguably dominates PC gaming. I could see Valve creating their own PCs, or Apple making their pads connect to the TV and a controller. But either company making a console, let alone partnering to make one? I don't know.

Edit: what Gaben says at the end makes me think that maybe if Orbis and Durango aren't impressive enough and don't meet Valves expectations, the'll make the hardware they want. So actually, I think it could happen, it all depends on what Microsony do next.