What I'd like to know is what where the expectations for the 360 (from MS)?
Knowing the goals being attempted are necessary to really judge how the console is doing.
For example, is MS wanted to gain stong foothold in NA built around FPS/online while exceeding Xbox outside US but knowing they would likely still finish behind competition outside US then it's doing pretty well.
On the other hand if they thought by releasing early and spending large sums on exclusives they'd get a lead that would guarantee them the top spot for consoles sold through 2008 and beyond then the Wii has already put paid to that (and to PS3 for the moment too).
The games industry is large and growing - and MS themselves might not have thought they'd do anything but improve on Xbox while still finishing behind Sony and Nintendo... or maybe they really did think they could take the lead with their second console to market.
For me, without understanding MS goals for the console this kind of thread is redundant.
Try to be reasonable... its easier than you think...
