Yes, Nintendo could have 4 cores. Nintendo could probably have 8 cores if they really wanted.
The problem is this: just exactly what kind of cores are we talking about?
The rumor mentioned G5 cores. The XBox does not have G5 (aka PPC970) cores. What is far more likely is that XBox has what a modified version of what are called PPE cores. Sony will actually have one PPE core in the PS3, along with 8 SPEs (think of them as being about like the vector units on the PS2 on steroids).
Now, getting to Nintendo. I could potentially see Nintendo using 4 PPE cores. That is a completely different beast from 4 PPC970s, though. See, a PPC970 has a part of the chip which rearranges code on the fly to keep itself busy while some instructions stall (say, waiting for some data from main memory), increasing performance, especially on poorly optimized code. Intel's and AMD's Pentiums and Athlons, respectively, also have similar hardware. The PPE does not have this. It is what is called an in order processor. In order processors are considerably less complicated than out of order ones, thus smaller, cheaper, and with a faster clock. The tradeoff is that certain types of code, like a lot of AI, will run very poorly. For predictable code like graphics and physics, though, it works great.
Point is, we will not see 4 G5s in any console any time soon at anywhere near the stated speed. Just as I wouldn't expect to see 4 Pentium4s, Pentium Ms, or Athlon64s. 4 PPEs, maybe. I'm a big proponent of going asymmetric: one complex out of order core for doing what it's good at, and a mess of in order cores for doing what they're good at. I doubt we'll see anything like this, though.
BlackGriffen