I think this generation will last longer than the previous ones... PS3 and X360 will soon have new motion controls: Sony and Microsoft just can't end this generation right after the launch of their new toys, the consumer would feel confused, if not abused...
The HD tech is already impressive enough for most games possible, and game's budgets are already really high: higher would be too risky for most teams out there... never forget a good game takes time: 2 years is a minimum, and i don't think most devs want to already develop games for the next gen, with brand new tools to master, rising costs, small initial userbase, etc... once again, too many risks, while profits are finally secured this gen...
The only company needing something new on the market will be Nintendo, for all the reasons we all know by now... the so-called "Wii HD" will maybe come sooner than the other "next-gens", if Nintendo want to have the same 3rd party library as PS360, and really be the market leader this time, for all types of games, even the most "hardcore" and all the "graphic beasts"...
But anyway, i think Nintendo will first release a handheld update, as DS will soon be 6 years old... with the brand new DSi on the market, it won't happen tomorrow anyway, as once again, the consumer would feel "abused" if a new console was realeased before 2011...
I only have Wii and DS, but i know i don't want to spend more money on hardware right now, as both consoles have many great games announced for 2010... for me, the Wii's even gonna have its best year so far, with at least 10 excellent and "big budget" titles already in the want lists of many... and many "yet to announce" projects we still know nothing about...
2011 and 2012 will logically follow that trend on Wii, the current market leader after all, even if 2013 (or holidays 2012) will be the year for Nintendo's next home console...
So no twilight, but quite the exact opposite: many good games to come for all the consoles out there, which is great for everyone... we never had so many choices: all the past classics are easily available, the digital distribution is gaining momentum, and the number of excelllent games released each year is absolutely stunning, in any of the "genres" or "styles" each of us could like... in the end, i think this generation will be remembered as the best ever...