As I stated in the other thread: I think it will all boil down to games/marketing/branding as it always does.
What do I think this means? Well, Xenon has an advantage in that the games have a one-year head start, but PS3 will have the later advantage of being more powerful and exploitable. This is why I think MS will try to counter that advantage by releasing Xbox 3 in 2009. I'm thinking they will attempt to shorten the cycle to launching at $249 every 4 years instead of $299 every 5 years, mainly to reduce the effectiveness of Sony's big investments in fabs. They'll likely support two hardware iterations simultaneously starting with Xbox 2 (but not Xbox) possibly through XNA.
Once again, I'll state that it's a risky strategy trying to get consumers to buy new hardware quicker, but it might work if the hardware is cheap enough, backwards compatible (beginning with Xbox 3), and uses similar peripherals. I'm mixed on whether or not I think it's a good idea.