I think both Sony and Microsoft are looking at trying to create a device that everyone will buy because it has many functions. Its like the new PSP, you can get it to play games, but you can also use it to play music and movies.
Microsoft wants to create something that can be used to link all your devices together. But if you don't want to go that route you don't have to.
It will be interesting to see how it plays out...and how it affects costs. Microsoft and Sony could be shooting themselves in the foot by throwing in all these added extra that will bring the cost higher, while Nintendo can bring in an equally powerful system at a cheaper cost.
Remember, it wasn't the cost that hurt the Gamecube it was the marketing, and lack of 3rd party developers...but if Nintendo could market the system, gather developer support, and have a cheaper system, then Nintendo could easily gain back marketshare.
And yes I know MS is going to have a cheap system with 3 versions of it...but that does confuse the customer and they may not know which one to buy.