There are no real details, but if you look at the industry and how the console and PC market is evolving (or devolving - is that a word?) ...
1. Business apps, web surfing, Email, Office are not GPU demanding (even under Vista) - this is a big chunk of the PC market (60% as I recall)
2. Games do demand GPU/CPU performance
3. Games on consoles are selling at a ratio of about 15:1 over PC games
4. nVidia don't have an affordable solution to make Crysis play smooth (three 8800 Ultras and still drops into the teens)
5. Vista sales just didn't happen (please no debates on this - Microsoft have even admitted this) and DX10 has fallen short of expectations
6. XBOX360 has done VERY well for Microsoft, more specifically the titles that run on XBOX360
Microsoft are developing a new console to replace the XBOX 360 (suggestions are it will not be out til 2010-2011 or so - I'm guessing that is a bogus date to make Sony feel relaxed, I bet xMas 2009).
There are only two companies that can help Microsoft -- AMD/ATI and nVidia. At first glance one might think the perfect marriage would be AMD/ATI and multi-core GPU/CPU solutions from a single company. However, some key elements. Intel will have 8 core procs out sooner, Intel will have 32nm procs out sooner, Intel procs will run cooler and consume less power.
It's unlikely Microsoft would approach AMD/ATI in their current financial situation and rumors that IBM might buy AMD/ATI -- the IBM vs. Microsoft wounds are DEEP. So who is left, nVidia. Again, you might think no way will nVidia work well with Intel. But there are signs those doors are opening in the interest of both companies.
Now Microsoft can buy nVidia without much of a financial hit, but the Feds would most likely block that (maybe). Regardless of who buys whom, the GPU performance trend is shifting and nVidia appear to be very good at providing bang for the buck hardware (9600 & 8800GT) -- and that is just what Microsoft needs in a console - affordability.
So we have Microsoft saying 2010-2011 for the next console but I think that is really going to be XMAS 2009 to get the jump on Sony. nVidia is frantically working to come up with a solution for Microsoft's next XBOX. PC Gaming sales are rock bottom, console sales are booming, and nVidia is going where the money is - consoles (they really don't have much of a choice). No real threat from AMD/ATI in the PC market, so why devote a lot of resources to building GPU solutions for an ever smaller PC game market (hence the release of lower cost cards leaving 8800GTX on still on top) -- the 9800 variants appear to be revamps of existing technology -- as in they aren't devoting the resource to come up with a truely new GPU for the PC.
So where are all the resources going...it has to be consoles and I'm betting Microsoft's next XBOX.