I think people are missing the point of where Sony and MS have been headed with their architectures when thinking and talking about the next gen.
MS went with a standard processor for the Xbox because it was quick and easy and for the sake of development tools. They then migrated to PPC because the PPC platform scales extremely well, is cost effective and is perfect for doing emulation (backwards compatibility).
Sony spent megabucks developing the Cell because again, they wanted a PPC derivative platform that would scale well, etc. Same benefits, different derivatives of the PPC architecture with the Cell being more specialized. Whether that is truly BETTER or not remains to be seen.
In any case, I believe MS will come out with a larger version of the 360 basically. Improved graphics card, maybe a physics chip, and more cores available of basically the same architecture. Development tools would largely remain the same, not a TON to learn for developers, and they could do it pretty cheaply. Going back to a standard Intel multi-core architecture would likely shred any plans for backwards compatibility (unless it's cheap enough by then to include the 360 processor in the box as well!) because of the fundamental differences between the Intel architecture and PPC. Endian difference, and other architectural differences are just too large. Same problem Apple had in switching to Intel from the PowerPC chips.
Sony had the Cell developed not just for their gaming division (although that was the biggest reason) but also to include in their other products as future needs dictate. So while they invested a TON, the payoff is potentially there for them. The next Playstation will likely use multiple Cell BE's with a graphics card. This will allow them to leverage their past investment, lower costs and have a much more powerful platform as well. In the end, the differences between MS and Sony are less although Sony will have more cost benefit since they've already paid to have the Cell developed. As far as the difference in power, while most people acknowledge that the PS3 is the most powerful console overall, it remains to be seen how that will translate to software. So, multiple Cells may give them an edge and it may not. Either way, MS has a way to easily produce a comparable console. And so the war will continue.
