Nex gen only starts when Sony says it starts and releases their next console. Until then it has not officially started.
This current gen started with the release of PS3 on 11th November 2006.

Because, time is on the PS3's side.  The differences between it and the X360 become greater as time progresses.  The manufacturing advantage goes to Sony (for chip shrinkage and slimer designs).  The perception of a big price difference will desolve as well.  MS already said they want to get out first again.

Sony will be in a better boat the longer they can keep from putting out the PS4.  Usually, PS launches around the 5 to 6 year mark of the previous console generation.  That's what makes me believe Sony will release it later.

Okay, I kind of get the global economy thing (though I don't really believe it will have a huge impact on gaming.) But other than that is there a reason everyone expects this generation (from console to new console, not console to unsupported console) to last significantly more time than previous generations? Someone is going to see some benefit in releasing in the next couple of years.

And what I really don't get is the backlash of people on this site. I know there are people who buy 10+ games a year and have all three consoles. Why wouldn't you want new technology? It should not take developers seven years to get a handle on a system.

It doesn't take that long.  For the PS2, it was about 6 years before God of War 2 hit, but other games took full advantage of the system before that time.  Anyway, it creates renewed interest in the console.  It's about the console's ability to STILL surprise you.  I get that just about everytime there is a new firmware released or the next game is introduced with better graphics/technical prowess than the last.

With the PS3, the system is SO flexible that their are almost endless amounts of optimization that can be performed.  It's not the it will take forever to "get a handle on" the system.  It's just that there are a LOT of different avenues to explore.

1. This generation of gamers seem to care about two things.  Buying a console that is considered the best and a console that has the hottest current and future games.  Since 2008, we know where that's heading.  The public was seeing that too, right up until MS's price cut.  That caused the year to end in a worldwide tie between the two consoles.  Those things matter.

2. The manufacturing advantage goes to Sony for obvious reasons. Sony owners their own facilities and specialize in chip design/shrinkage process.  The PS3 was designed with this in mind (hence one of the reasons for no eDRAM).  Sony came out a year after the X360 and is already about to put out 45nm chips.  MS is JUST came out with 65nm chips in Dec. at retailers.  I would call that a pretty big manufacturing advantage, no?  Sure MS can keep dropping prices, but they want to make money.  Would they go back to lossing money in their 4th year after barely making some profit?

3. No, Sony didn't say they wanted to challenge MS on release times.  However, it's good business to follow soon after.  Sony already sees the issues people are having with the one year difference in launch time.  You have people claiming X360 is selling better due to not aligning launches.  Public perception plays a certain role in future sales.

4. You can compare PS generations as long as the business model hasn't changed.  According to the developers, it hasn't.  Therefore, a comparison of tactics is completely warranted.  Don't confuse the results with the business model.

MS had plenty reason to continue from the original Xbox.  It was never about the 1st Xbox.  It was about THIS Xbox.  If this one didn't sell more than the 1st, they might would try one more time.  They still have to see if they can make the X360 pay for itself.  It has quite some distance to go.

5. NO console in recent history has made a profit within 2 years except the Wii.  It's NOT the business model consoles usually stick with.  Usually PS is profitable by now, but the PS3 is taking a bit longer.  Last estimated have it almost breaking even.  People need to remember the PS3 has barely been out 2 years in Europe and about 6 months longer in US and Japan.  There is a LONG way to go in the PS3's lifecycle.