I think Microsoft is a little short-sighted if it thinks that installed userbase of their current console will predict installed userbase of any future console. It's not like Windows, which is simply a software upgrade. Especially since Bill Gates has said that he hopes the next Xbox includes even more PC-like features, including web browsing (no doubt through their MSN network).
That said, I think Microsoft is toning down the amount of money it throws into the Xbox project lately. There have been plenty of companies that are available for purchase by console manufacturers that Microsoft would've purchased a year ago, but are sitting on their thumbs about now. Notably the Vivendi groups.
Anyway, people don't buy new consoles just because they're released -- they buy them because there were a lot of games they liked for previous consoles, and those games are being released on the new consoles too. Right now, Microsoft is still behind in game development -- good games are coming out, but at a rather slow pace. Most Xbox people I've spoken to are simply excited over 2 games (Fable and Halo2), both of which lack a definitive release date. While that's fine for a new console, it's not good for any prediction of future sales. I mean, compare the install base of the SNES to the N64. And the Genesis to, well, every sega console afterwards.