One thing I find interesting is that in terms of hardware design, Sony and Nvidia are more similar than not in some ways. There's been comparisons recently that NV3X is influenced by the concepts of cell computing. the NV3X cpus gain their best performance when accessing the hardware directly or going through their software layer. The PS2 (and likely the PS3) are going to behave somewhat similarly. If you are already mucking around in the hardware to exploit cell, you might as well muck around in the gfx hardware too.
This goes very much contrary to what microsoft does. Microsoft wants all games to go through DX, and to have layers of abstraction for easy programming. ATI seems to excel at creating cards that are good at doing this. Both the 8xxx and 9xxx series of cards do very well in DX8/DX9. If Nvidia wants to be in the xbox2, then they are going to have to start catering to DX again, and with the CG initiative, I don't know that I see them going that way really. Honestly, it makes a lot more sense in terms of the *current* hardware designs to have MS and ATI paired up, along with NV and Sony paired up. Should be interesting to see how things turn out.
Nite_Hawk