I think it would go a long way in helping people to enjoy strategy games and first person shooters more and the system could be used to browse the internet/play HD videos, etc.  The original reason why Microsoft said they didn't want to was so that the Xbox wouldn't be seen as just a PC but since the competition is allowing web browsing, etc, I can't see that being a problem.

Correct me if I am wrong, but isnt it possible to play FF XI on 360 with a keyboard? I am pretty sure that in the future they are going to allow it, and considering there was some other company making PS3/360 wireless fps controllers, I think that people would like to use their keyboards.

I see only two major problems:
1. Developers will have to optimize their console games for both the regular 360 controller and for the keyboard/mouse. Although, this will not be a problem for games that also come out for PC.
2. Gamers will literally be forced to use keyboard/mouse combo in order to stay competitive online, and most of the people I know, including me, dont have a good location for putting the mouse and the keyboard. Although, this problem can easily be solved by allowing keyboards and mice to be used only during single-player.

Im quite sure that it is up to the game developer, the 360 will use them if they are programed into it.

@Chemical

I think Epic is going to try to get around that problem with UT3 on the PS3 by allowing gamers to set up online games as either gamepad only, keyboard/mouse only, or mixed. But I do agree that it would likely make it harder for developers who would have to account for two different control schemes in their games.

Consoles have to be different from PCs or there's no point buying them.

 So options are a bad thing now?  How would adding keyboard/mouse support be a bad thing?  Many people see it as a barrier to the console rather than a boon.

I dunno. I suppose the option would be nice...but it should definitely be optimized for a gamepad...it's more accessible for consoles.

 I don't think they did, but I never played it on the 360 (only PC and a little bit on someone else's PS2).  Anyone playing the console versios can communicate by using the autotranslator and macro's so it does look like they are typing.

as for allowing mouse and keyboard, I'm for it.  I personally wouldn't use because I just don't have a good place to put it while playing my 360 but it defintily has great advantages.  i think there is merit in having gamepad only/ mouse only/ and mixed servers but i would be curious of they started to turn one sided. 

You already can use a mouse and keyboard for the 360 but it will cost you about 50$-80$, this is what the newer model looks like, It´s a"XCM XFPS 360 PRO" and it works with all games:

it has two wheels for adjusting mouse sensivety and you can put the gamepad buttons on any keyboard or mouse key you whant, you can put a turbo (auto fire) mode on any button, and you even get too use your old PS2 conroller, light gun, guitar or dancing mat. I´ve never played with it but I read it works very well, if I goes down in price a little I might get one as soon as I have my Falcon 360 :)

For more info and pics check here: http://www.xcm.cc/XFPS_360_PRO.htm

If the 360 version of C&C 3 had keyboard and mouse support then I would have bought it, probably can say the same thing about other RTS games in the future.

I just hope both the PS3 and 360 start giving the option for keyboard and mouse for all RTS and fast paced FPS games in the future.

Unreal Tournament, I will probably not be using a gamepad to play it because it is way too fast paced.