Looks like a Natal pack in to me.

This is clearly poorly understood. Certainly MS will act like a relaunch of the 360 when Natal releases and it would be right time (if not sooner) for a redesigned 360. Now that doesnt mean the Natal will be built in. That makes no sense. Natal unit will sit outside connected by USB cable (would be even better if wireless). It doesnt make any sense to even put part of Natal into the 360 because that means they would be producing 2 version of Natal. One for existing 360s and one for the new version.

I still wonder if the camera we see is for the 40M+ Xbox 360s in the wild now and the one Natal 360 will have improved hardware and internalise that cameras processing which may be cheaper in the longer term.

Didn't Shane Kim already say that Natal will be like the launch of a new console. Most likely going to be the 360 guts with a built in HD (probably a flash drive), slim case, and motion camera.

Current 360 owners should just be able to get the Natal camera to upgrade to the current configuration. This seems like a good idea since they can extend the life of the 360. The Wii pretty much proves that graphics aren't important to most consumers. It will also be a plus since current developers won't need to develop new engines or spend the extra money to create the hi-res assets. (Ubisoft says next gen games are going to cost $60m).

Hopefully this is how it pans out.

X-Box 360 + Natal does not equal new console.

The man said new console.

A relaunch to appeal to the Wii audience is ok with me.

If it has better GFX capabilities that is a slap in the face of the entire 360 userbase.

No he didn't.  According to the source it says new Xbox 360:

http://www.tgdaily.com/content/view/42919/118/

Rumors can be confirmed, as Ballmer stated openly during a speech on the recession to those in attendance at the Executives Club in Chicago, a new Xbox 360 will hit the store shelves in 2010.

Steroid is FAIL .. BAM there it is.

OT - I can't wait for this

INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION INNOVATION

Oh Seece is that a personal attack? I would report you but I'm not a sniviling snitch rat.

"The new device will be equipped with technology that is “really, really, close” to an actuality. The console, which was described as having a “natural interface,” will have a built in camera with the ability to recognize movement and voice."

That don't sound like no X-Box 360 to me. Whether it's a rebranding, renaming, spec upgrade or something entirely different, there's one thing you can count on for sure: 

PS3 will outsell the 360 confirmed.