Not to mention that this is the same site updating their own rumor.  And that no one else has been able to confirm or deny this rumor.

You mean to say that some small,  random xbox fan site isn't the most trustworthy source for news?

Or they could be thinking long-term. 

Add more memory, so bigger games can be made many years out.

No. You just couldn't use it because MS only implemented PAE for xp64 (for consumers, that is).

Generally speaking no.

Hell, unless a rumor makes sense I'm not generally going to believe it.

It would be easier for Microsoft to add 8GB than to add 4GB.  Adding 4GB means altering your motherboard.  Adding 8 GB and switching to 1GB memory chips instead of 512MB memory chips would be easier.  The only drawback is that you're reducing your memory chip frequency.  If they stick to the same supplier.  It's possible they could get a higher speed chip at 1GB per chip than what they're using right now.

I'm pretty sure there was a problem with XP prior to SP1 and more than 3GB, and there were issues with Windows 2000 as well, if I'm not mistaken.

I only remember win9x-kernels to have problems with more than 512 mb, nothing with nt-kernels.

Yeah exactly. Some people think you can just keep putting more and more ram into a machine and it will just magically get better. There is a term called diminishing returns. Where just adding more and more doesnt actually give you any reasonable benefit/advantage.

As far as i understand it...12GB would not give Xbox any additional benefit unless companies were making games (on PS4/PC) that utilise this amount of ram. The other problem is you have to get the data into memory to start with, and the larger the amount, the longer it takes. It's great when its there, but it's going to take time to put it there (unless you have the bandwidth to do it). So more data does not necessarily mean faster.

If both consoles had 512mb ram, and one of them added more, that would be a big benefit (we saw it this gen with 3rd party games, where Xbox was easier to develop larger open world games with shared memory). But thats only because we have games that are using more than that amount of ram.

But when currently games are using 512mb ram, and top end PC games are using 2-3GB RAM, 5GB ram is definately going to be sufficient for quite a few years. Both MS and Sony will reduce their OS footprint over the next few years, and so over time they will probably free up another 1 - 1.5 GB for games. Which will certainly allow the consoles a long shelf life in terms of memory requirement.

8GB GDDR5 would be preferential to 12GB DDR3 if the game is running on say 5-6GB Ram... having more slower memory will not be an advantage for that. Of course it would allow you to assign more memory to non gaming functions.

Finally... this isnt going to happen imho. More cost for very little benefit...

Id love more RAM :D

If it will really happen, and XBOne will launch without delays anyway, it will mean it was already planned for many months now.