Now let's think about the power of Xbox, Gamecube and wii in CPU and GPU terms and then compare it with the first AMD APU model (Zacate).

Xbox used a modified P3 - Celeron hybrid at 733 Mhz and was easily faster than GC. The wii has twice the CPU power. Given that Zacate is easily faster than Dual Atom cores, which in return is much faster than P3, Zacate's performance should already be ahead of wii.

Xbox's GPU was something between Geforce2 & 3 as I remember, ahead of GC then. Wii should have roughly the same graphics capability as Xbox. Zacate, in this regard, is generations beyond wii, and should be comparable to Xbox 360.

Now that APU is only the beginning of the story, and specifically designed to be cost effective. That architecture will have been improven in the next couple of years, and the more flexible designs in a larger die or higher buses within, with more cores etc, has the potential to deliver a much better performance.

Guys, please remember that the GPU is the bottleneck in most games. Only few games are CPU intensive (like Starcraft 2), which can be reprogrammed accordingly. I haven't even mentioned the power and cost efficiency of the solution. They will be utilized on netbook and cheap ultraportables for God's sake!

Even the very first APU gives you a performance way beyond Xbox/wii and not too far from Xbox360. On top of all that, they are very programming friendly! I bet they can still easily design an APU today that will top both Xbox360 and PS3,  for a lower cost than their rivals respectively.

We are far from a PS4 or Xbox 3 kind of performance though  (aka latest i7 & D11 GPU level performance)

With the incoming WiiU, later the PS4 and new Xbox, my original predictions seem more and more likely. We almost certainly know that WiiU will come with 1 GB of ram and a modest cpu-gpu configuration whereas the next gen hd console will likely opt for 2 GB RAM or in this ballpark, with more integrated CPU and GPU solutions so AMD's APUs approach sounds perfect.