Popular systems will continue to sell even once the next system is released, regardless of demographic, for several reasons. For one, they're a lot less expensive than the new systems, so budget-conscious consumers would probably choose them over the new one. Also, since it has a huge library of games, many of which could be obtained cheaper than a new system, people who had a different system may buy it. The PS2 isn't the only system which continued to sell for a few years after its successor was released; there was also the PS1, SNES, and NES. In fact, in Japan, the NES/Famicom was in production until 2003. The only reason that the Nintendo 64 and GameCube were stopped when their respective successors were released is because they were selling relatively poorly at the time.
If Nintendo's five-year cycle is to be kept, then the next system would have to launch Holiday 2011. But I don't think that'll happen, and not only because I expect the 3DS to launch next year, and Nintendo will want it to have at least one holiday on its own before they launch their next home system. Nintendo releases their new system when they have a reason to: They needed the SNES to compete with the Genesis, they needed the N64 to keep up with the PlayStation and Saturn, etc. There are currently no known plans for Sony or Microsoft to release a new system in the near future. The NES/Famicom (Nintendo's most successful home system before Wii) went for eight years in Japan before it was succeeded, and we might see an eight-year cycle for the Wii as well.