Now, if it is indeed true that the X-Box 2's chip will use eDRAM, then it may actually be a way for the chip to support higher resolutions. If it is not necessarily designed to house the entire framebuffer on-die, but instead to intelligently cache it at higher resolutions, then it could go far. If it is designed to hold the entire framebuffer on-die, then there may be problems with performance at higher resolutions.
It wasn't very hard to translate a rather misleading speculation, was it? 9 out of 10 small tidbits get interpreted in a rather obscure or even exaggerated way. I'm not in a position to know what the specific HW really will contain and for what purposes, but an intelligent cache makes far more sense doesn't it?
As a reminder of the usual nonsense that circulates the rumour mill, the NV40 would have 16 pipelines and/or 16MB of eDRAM.....*cough*