How many nm will you speculate that MSFT will configure the 720 chipset with?  Rumors abound with talk of the Larrabee 2 so maybe a 22nm or smaller?  Moore's law is speeding up rapidly so conventional wisdom is like 75% right now ;)

It won't be smaller than 22nm. It probably will be 22nm. You can be certain the PS4 will be at 22nm, so I doubt MS would want to be 'outdone'.

22nm or 32nm - it depends on who makes the chips! ^^

22nm isn't happening anytime soon, in an affordable fashion. Its a new fabrication tech... its not going to become cheap enough to be feasible for a console until well past 2013 I think, maybe later.  I wouldn't put 2016 out of the question.

32nm is perfectly fine for a much more powerful console -- one capable of actually doing 1080p games at 60 FPS, outside of racing games (which don't have to deal with skeletal animation, and usually have weak, or "smoke & mirrors" environments).  Industry demand for new consoles will probably call for them before 22nm is really ready for the average consumer.

On second thought, this is probably true.

22nm will probably be around 2011, and it will definitely be relatively cheap before 2013. By 2016 there is a decent chance that 16nm chips will start to hit the market. 

Remember that 5 years ago we had just hit 95nm, now we've had 45nm in mainstream Intels for almost a year.

But anyways it will probably be at 32nm given the timeframe. It might even be something odd like 35nm. The biggest limit will be the GPU, which will likely be much more complex than the CPU and make using a new, smaller manufacturing process much more difficult.