Games and XBLive is where they make the most dough.
With every game being live aware as a minimum, you can see where they are going.
MS is pushing for the everythings connected to the internet theme. Just look at the new media center OS's etc.
If they start charging more for live though, it will be irritating.
If they charge you to d/l updates / expansion packs though, it will be very annoying.
But going by those specs... damn. Near photo realistic graphics + larger games = longer dev cycle. But publishers dislike long dev cycles. So it will be a balance between the games that are rushed or under made because of Developers, and Duke Nukem Forever clones...
A licensed Xb ready to go engine would be handy though. And making it easier to port from PC to Xbox might increase the flow...