Just as a point, if Nintendo followed their strategy from this generation in the next generation (in terms of processing power) the result would be a system which was 2 to 4 times as powerful as the XBox 360 or PS3; if they were trying to produce the most powerful system they could produce and for $300 it would be 4 to 8 times as powerful as these systems; and if they were really trying to push the limit the system would be 8 to 16 times as powerful as the XBox 360 or PS3.
Moore's Law hasn't stopped being true, and people don't expect it to stop being true until (sometime) after 2020. The next generation system will be based on a 32nm or 22nm manufacturing process which means they will be able to produce a processor with 8 to 16 times as many transistors on the same sized die, and they will be able to run this processor at a higher clock speed. This means that a Quad Core Cell processor (with each core having 8 working SPEs) running at 8GHz would probably be a very thrifty, low performance, CPU in late 2011 or 2012 (when Nintendo releases their next console).
