Ian: The kid-attracting doesn't go along well with statements like "We don't care for the young children, once they turn 12 we will take them away from Nintendo anyway" (paraphrase). That's like announcing you will never again develop for the GC and dis the device publicly just to resume support a few months later...
Cubedcanuck: Perhaps they looked at how well any and all competition to the GB/A fared? Gamespy has recently released a list of top ten failed handhelds, that's quite a lot. Also, MS would have tried the same as all the other competitors: More power, less battery. That never worked and even MS probably figured that out. Also, how would you make a handheld out of a PC?
BTW, it's doubtful the XBN will be compatible to the XB. MS said they won't do that if the device gets too expensive.
Whether consciously or not, MS is doing the exact same things Nintendo is doing. Microsoft often bashed Nintendo for many different reasons, now they're heading into the same direction. Ironic, isn't it? Sounds almost like admitting defeat.
What bugs me about the XBN is how they said again "Microsoft is in for the long term". Doesn't sound very confident. Or they want to defeat Nintendo like they defeated Netscape?