For what I read the first Xbox was killed early due to M$ buying the same CPUs from Intel and same GPU's from Nvidia at the SAME PRICE from launch to its death.
Unlike the PS2 (and now the 360) which over time they can streamline and make cheaper smaller chips and save on production of hardware components.
This is why Microsoft and Nvidia had a falling out over the graphics card on the Xbox. They where charging M$ the same amount for a five year old chip (this part of the reason the xbox was a money pit).
Its been two years and they already made a smaller/cheaper CPU which is saving them manfacturing money and actually selling the 360 at a profit. The new smaller gpu (jasper) will be out this summer, saving them more on production costs. This was not possible on the xbox.
So I think this time around Xbox 360 will have a longer life spand due to them Licensing the Tech from IBM & ATI and being able save on the manufacting cost of the chips.
On the softare side I think they will have some good in the pipe for 2009 & On.
Some that come to mind are probably Mass Effect 2, a new bungie game (they got be working on something now and it will be 2 years since HALO 3), Too Human 2, Bio-schock 2, Forza 3, Team Ninja games (Code Cronos/DOA RPG..Rumored), something from Rare (new Perfect Dark, etc. ) and Lionhead. Some new games from Mistwalker (Cry On or BD2), Infinte Undiscovery (2009).
With all this I think it will reach 40 Million or more.