As Windows evolves, it eats always more memory, Win 2000 was at little more than 200MB with only antivirus, firewall, antispyware and default services on, XP increased the requirements to a level that then was considered almost eccessive for the average memory equipped, but now is neglectable, but Vista has really excessive requirements for the average current PC. While consoles have streamlined OS's, with only carefully selected essential services on (mainly network), leaving almost all the memory to games. The HW is standard for all consoles of the same model, this allows more optimization, that on PC would require an impossible wor to address all the possible configurations. And as MikeB wrote, the engine may be modified to address strenghts and weaknesses of consoles HW compared to PC's.
And in favour of consoles, now comes the fact that still PCs are strongly tied to 32bit, making still difficult to make full use of 64bit addressing and more than 4GB RAM, the legacy SW, and HW too, with 64bit drivers still scarce, especially on older HW, is so strong that even Windows 7 will still have a 32bit version too, so the opportunity of Windows PCs as a whole architecture, not only a minority, to do a really huge jump in memory dotation compared to current gen consoles is postponed to a distant future, to the desktop version of Windows successive to "Vienna". This gives consoles manufacturers all the time they want to design the next generation so that their memory will fare well compared to that equipped by the average PCs available then. Moreover, if next gen comes before the second to next Windows version manages to shift a vast majority of users to 64bit, consoles could even have more usable RAM than average PCs for years and this could even menace Windows itself more than Linux and MacOSX. Current gen consoles felt short as general purpose home computers because of too little RAM for productivity bloatware, next gen could be adequate in every section and simpler than PCs. It would be ironic, quite like Dante's Inferno's "contrappasso" (talion) or greek tragedies' catastrophes because of hubris, if in its race against Sony MS started a thing bigger even than itself