It's a nice spike for them, but we all know Halo 2 is going be the last major spike for the Xbox in general, so with luck its lingering effects on Xbox Live will be positive, but I don't see them pulling a profit next quarter or anything similar for a while.
I also don't think it's a "gamble" for people to pick up an Xbox--they can see what it has and decide if it's worth it, and they basically know it's being phased out (though there may be those confused on the back-compat issue with Xenon... and they can join the club right now
), so whatever. There's plenty to see and play on the Xbox, and the main advantage from this end is that the software is all cheaper now.
I do not, however, think that the Xbox will be maintained for much when Xenon is in play. Microsoft itself will certainly be shifting its focus, and the platform doesn't have the kind of installed base the PS1 had or the PS2 will have when next generation is in full swing to still attract the new games.
Headlining titles will always shift generations, of course, but if it's outside of an easy port job or quick sequel to an old, fairly popular game...? I don't see much of it. If any old-generation time gets spent it will be aimed at the PS2 (or in the portable arena, at the GBA) and if "afterthought" development can bring something to Xbox (and to a lesser extent GameCube) then... sure.
The one advantage for the Xbox, at least, will be the Xbox Live link. It's gotten a popularity surge and will be a common factor for years, so for those Live users we'll likely see a disproportionate-to-now amount of Live-play games hit the after-market, as that will be the main attraction from then on. Even half-hearted sequels of somewhat popular games will bring in decent sales by only adding reasonable online modes--and there are many titles to choose from. Single-use taps, though, because developing another title would take too much time and people would be firmly lost in next generation.
But previous-generation consoles are NEVER a "ripped off" thing unless you're a stupid consumer. You know exactly what you're buying, and if you judge what you see worth the cash, then go for it! There really aren't going to be any surprises.