I'll post what I posted in another thread:
I actually think the 360 is somewhat supply constrained, but only the Premium model (is that what they're still calling it?). Everywhere I go, I only see Arcades and Halo models. MS doesn't have a problem supplying systems. They're problem is that over the last few months they've been pushing retailers to take on stock of a bullshit system that no one wants, aka the Halo 360.
Now the retailers are stuck with a system that's in greater supply and less popular than the PS3 and they don't want to take on any more 360 stock, even if it is the popular Premium model. This is partly why retailers seem to love the 360; they have so many systems in stock that they have to promote the hell out of the systems. It has always been MS's strategy to flood the market. They did it Christmas 2006 and they were able to trick retail outlets again this past Christmas with that Halo model.
My Top 5:
Shadow of the Colossus, Metal Gear Solid 3, Shenmue, Skies of Arcadia, Chrono Trigger
My 2 nex-gen systems: PS3 
and Wii 
Prediction Aug '08: We see the PSP2 released fall '09. Graphically, it's basically the same as the current system. UMD drive ditched and replaced by 4-8gb on board flash memory. Other upgrades: 2nd analog nub, touchscreen, blutooth, motion sensor. Design: Flip-style or slider. Size: Think Iphone. Cost: $199. Will be profitable on day 1.
