chap,
The xbox came out 1 year after the PlayStation 2...
The GS had very limited math capabilities ( no T&L and no Pixel Shading )... in theory you could have Pixel Shading and T&L on the Visualizer alone leaving ~1 TFLOPS for physics...
It woould not match Xbox 2's polycount, but even that configuration would be possible... the programmer can decide whether or not to do T&L on the Broadband Engine or off-load it to the Visualizer... software Cells can migrate
And yes, we have seen games like Splashdown, GT3, etc... even Jason Rubin admitted the Xbox is 1.5-2.5x more powerful at the end, yet in physics and animation PlayStation 2 has done MORE than just being competitive and you know this too...
The EE's achilles' heel appears to be he integer side of things: while the MMI SIMD instructions are nice and powerful, the two ALUs, thanks to low clock speed, a lack of L2, small L1 ( data ) and insufficient ( IMHO ) Scratchpad RAM, are not very fast in scalar integer operation and chips like the Pentium III in the Xbox have the advantage here ( 733 MHz, Out Of Order Execution [R.O.B.], 128 KB of L2 Cache [Instructions+data], 16 KB of L1 Data Cache, 16 KB of L1 Instruction Cache, etc... )...
And while you would never see max efficiency, SSE bring the XCPU close to 3.2 GFLOPS... and the T&L is don in the GPU...
~1+ TFLOPS... I do not see an Intel or AMD processor even coming close to 400 GFLOPS in early 2005 ( it has to enter mass-production before launch )...
a 10 GHz Pentium 4 can do 4 FP ops/cycle... and that would put it at 40 GFLOPS...
Let's assume that Intel also adds FP MADD instructions and we can rate "SSE4" at a peak of 8 FP ops/cycle... that is 80 GFLOPS...
Now, let's double the number of "SSE3" units... we reach 160 GFLOPS...
We are talking about a 10 GHz Pentium IV/V ( Netburst architecture... or even the next IA-32 architecture ) processor with two full-fledged FP Vector Units with 4 FMACs each.
In order to achieve much more they would have had to invest in e-DRAM ( to give the processor enough bandwidth to be able to process this much incoming data and keep the execuition units fed... ), more FP units, etc... that would be tough to have coexisting with the old x86 baggage and woudl have required several years of R&D... it would be practically a brand new architecture...
Prescott should be released by Intel later this year and 2004 will be the year it will be pushed to the moon, with 2005 the year it will reach cheap Desktop PCs ( I said cheap

)... The next IA-32 architecture should be ready by 2005, but this is a single generational leap over the Pentium 4 architecture and it was built as a Server/Desktop/Mid-range workstations processor, not as a ultra-high performance embedded processor.
Integer wise the Intel offering might still beat the Cell processor in some scenarios, but it won't be a land-slide victory and I do not see the FP Throughput of that Intel offering will match the Broadband Engine's FP processing speed the same way the XCPU did to the EE ( efficiency aside... ).
Xbox 2 is coming out in the same year as PlayStation 3 and GCN 2, not 1 year later... it is already almost Summer 2003 and in less than 2 full years you do not have time to design a 0.5-1 TFLOPS class general purpose processor... MS has a lot of cash, but that is not infinite...
A giant like IBM could not have developed and produced something like Cell in two years ( it took 6-7 years for Intel to prepare the IPF architecture and compilers and tools and for them it was such a radical move that the adjustement prooved to be tough... they had experience in CISC processors, IPF was initially an HP concept... ), what makes you think Intel would do that for MS... ? Even if they started in 2002 ( Cell as an IBM project started quite a while before they started the joint venture with Sony ) the amount of money needed for such an R&D undertaking could not be easily kept hidden... also judging the fact both Intel and MS are publically traded companies...