No, The box this site proposes would cost 1200 dollars or more to build and then you enter into the PS3 scenario where no one wants to pay that much.
My tentative idea for the "next xbox" would be as follows-
Xbox 1080 (see because whereas 360 is 1 revolution , 1080 is 3 revolutions that makes it better and also you can cross market with 1080P full HD)
The goal will once again be profit first , everything else second.. well perhaps profit-quality control then everything else. MS will build a smaller much cooler running box with technology that's cheap and easy to mass produce but still atleast a little better then what's in the 360 right now and they'll launch it at a lower price to sell more systems faster.
This won't be no rush launch like 2005's 360,000 360's on day 1, no it'll be 1 million systems day 1 US followed 2 weeks later by 1 million systems in Europe and a week later with 250,000 day 1 in japan where it will come at a lower price and prepackaged with 2 or 3 games.
The xbox 1080 will be 100% backwards compatible with all 360 software, xbox 1 game discs will NOT run on it but the forthcoming digital download xbox 1 games will also be downloadable on the 1080.
Graphically the systems capabilities will be 150-200% of the 360- Something like gears of war which ran at a locked 30FPS @720p on 360 will now be able to run at 60FPS @ 1080p. Whatever changes need to be made to the hardware to accommodate that example would be contained in the box. Likewise, there would actually be an enforced minimum resolution/FPS/AA requirement for ALL games on the system. That limit would be 16X AA @ locked 30FPS @ 720p, games that wouldn't meet this minimum requirement would have to settle for digital distribution which would be much more open on the Xbox 1080. Another example of what I'd expect the 1080 to be capable of - running crysis at that enforced requirement. So whatever that'd take that's what'd be in the guts of the machine.
The systems interface would allow you to toggle between the 360 or 1080 dashboard depending on what games you had inserted and which marketplace you wanted to use. There'd be digital download games that are only for the 1080 so they'd be on the 1080 marketplace. It should also be noted that your gamertag and gamerscore will again carry over and you'd now have 3 seperate scores displayed in your profile- one for the 360 dashboard that'd be ONLY 360 games and in the 1080's dashboard you'd see a 1080 only score and a lifetime total.
The format though.. I figure there'll be dual releases like the ps3 has , games that come to the network as well as retail but for the most part games will still be primarily released at retail on a disc. The issue though is what disc, I absolutely do NOT see a dual format drive being included , MS has backed HDDVD so unless it's abandoned by early 2010 that's what'll be in the box, in fact even if bluray wins I still see some sort of HDDVD tech being in the box over MS using a bluray drive, it'd probably be cheaper and by 2010 they could have quad layer discs that hold 39 gb which should be more then enough.
The question of a harddrive though... This is where things get iffy. I don't see them splintering the market like the 360 did but hardrives are usually a set price and never really get super cheap. To remedy this I think the console will have internal flash based storage of 17 gigabytes, 16 gigs of this would be used ONLY to cache game data and would act like an install file dump. The extra gig would store your gamertag and saved game data. You would then also have 2 options for external storage space- 8 and 16 gig memory cards of the flash based variety for 50 and 100 dollars OR you could buy a hard drive , much like the 360 doing BC for xbox 1 games you'd have to buy an actual harddrive to utilize HD capable 360 games, only xbox 1080 games would use the onboard flash storage. This harddrive would basically get replaced annually by a bigger one that costs the same and old stock would be slashed in price. I think it's safe to say given where we are today that you could walk in and buy a 200 gb HD at launch and it'd cost 150USD. Again prices would seem high but that's because they are still trying to make money here.
The controller would remain mostly identical to the current one, perhaps slightly better on battery life, it'd still be wireless only now the headset would be only wireless. A tilt sensor or gyro ... idono I just don't see it happening.
Games- expect the RnD on this to give out sample specs to developers 18 months prior to launch so that games will actually be up to par, there'd be a migration program that'd essentially make porting a half done 360 game to 1080 a simple and painless process.
So the xbox 1080 will launch at 300 USD , 8gb memory for 50 USD, 16 gb for 100 USD and 200 gb hard drive for 150 USD. The system would only have this single SKU to save manufacturing time and money.
Guesstimations at specs in list form-
Cpu 4ghz 8 core
Gpu 2x the 360
ram 4 gb
System size would be 15% smaller then the 360 and the power supply would be half as big but still external, adding the hard drive would make the unit roughly the same size.
The only reason to upgrade would be becuase the 360 will be fazed out of production within 18 months of the 1080's release and the 1080 would simply be a more reliable console and well, the new sequels to your favorite games would be there. There wouldn't' exactly be any sort of revolutionary new ideas at play, just a 360 only nicer looking.