I've heard some strong rumors about the xbox 2 including that they will not have a hard drive in order to keep the price down. That will be too bad considering the hard drive was one of the major selling features.
Of course with all the problems the xbox has been having, I wouldn't be surprised if it went under. I only had mine for 3 weeks before it stopped working. When I went to the support forum I found the problem mine has is far from unique. I've had about 10 game systems in my life and this is the only one that has not lasted 5 years or more. And it was always the controllers that stopped working, not the machine itself.
I think microsoft makes more money fixing the things then selling them. $99 flat fee after the warranty expires, regardless of what is wrong or whose fault it is. Not to mention that it cost me almost $25 to mail the stupid thing to the repair shop even when it is under warranty.