I think Nintendo has the advantage of working with the same partners on the Revolution as they did with the GameCube. BigJim's explanation of it being a GC on steroids isn't too far from the truth in terms of PROCESSING and GRAPHICS HARDWARE. MS is going from an Intel and nVidia setup to a PowerPC and ATI setup. That's a big change for tool development and backwards compatibility. All of Nintendo's discussions regarding hardware innovation have been in terms of the interface--that's why they are so worried about theft: the innovative aspects are fairly platform-independent, and could be replicated within a controller for the Xbox360 or PS3.
Nintendo is hoping similar achitecture and the same (or an augmented) API will make development fiscally and creatively easier for itself and third parties. And you know, what, they might be right if the PSP at E3 is any indicator. It is looking like developers and publishers are shying away from the overhead of PSP's larger budgets, and instead are gravitating toward the DS with its lower graphical expectations and more consumer-friendly prices. People who love their PSP and bought it at launch, including individuals on staff, were very disappointed with the PSP showing at E3 when compared to the DS and is wide variety and surprisingly good third party line-up (Viewtiful Joe, Emergency Room, Phoenix Wright, Sonic Rush, Pac'n Roll). The DS started with a weak line-up, but the PSP looks to have an equally dry spell. If you thought a lack of games hurt with your $150 system, just imagine!