Major Nelson is clarifying what Ballmer said. Although he doesn't explicitly say its a rebranded 360 he says its only half way into the life cycle.
http://majornelson.com/archive/2009/06/18/to-clarify-what-steve-said-earlier-today.aspx


To clarify what Steve said earlier today....

A few people have emailed me regarding something Steve Ballmer said earlier today about a new Xbox coming in 2010. As the Xbox team stated at E3 two weeks ago, we are not even halfway through the current console generation lifecycle and believe Xbox 360 will be the entertainment center in the home for long into the next decade. Project Natal will be an important part of this platform, but we have not confirmed a launch date at this time.

man, would be awesome if they upgrade the hardware as well.

By "new" they mean a new sku.

wow if it really is a new xbox talk about having no faith in your system

Im not sure what they would do, but it would make sense at the very least to make the Xbox 360s which come with Natal bundled as cheap as possible and adding another core and more memory to the Xbox 360 Slims would be cheaper than using an extra processor on the camera itself. They probably wouldn't use it for anything aside from Natal specific applications because they don't want to split their userbase too much.

No, talk about having fath in a better system.

It's just a new sku who cares!

if its just a slight upgrade thats cool but if its a whole new unit i wouldn't be happy as a 360 owner