Oculus Rift....60FPS or 120FPS

Good question, not much is known about the details of how the Oculus Rift works at the moment, but its 3D effect will probably work like a 3D monitor. Each side will display a different frame, so in terms of both eyes, you'll be seeing half of the total amount of frames being processed by the GPU. So when the GPU is running at 120 FPS, you'll be seeing 60 FPS, and when the GPU is running at 60 FPS, you'll be seeing 30 FPS.

What did you mean by a display that shows 120 FPS? The Rift is the display, you shouldn't need a secondary display.
 
To my knowledge its just a side by side system, theres no framerate cutting or anything like that, though the performance hit will be greater than 2D. You can use Crysis 2 and 3 to get an example of how it works, just go into the 3D options and choose side by side.
 
It depends on the resolution they settle on. The test systems they have now are very low resolution, but I believe they plan to have 1080p in the final version. That means you'll need a system capable of hitting 60ish FPS at double a 1080p resolution (3840x1080). That is because the system has to render a frame for both the right and left eyes. Rather than flipping a single display back and forth between the left and right eyes, like active stereoscopic 3D, it displays images to two separate screens, so it isn't exactly 120hz, but it is two times 60hz.
 


so could the next gen consoles use the rift
 


That depends on whether they add support for it. They do plan to add support to Android, if I understand correctly. My guess is they will try to convince Sony and Microsoft to do it, but we'll have to wait and see.
 


but are they powerful enough to power the OR to its potential like a high end pc could
 
I think it will be 1080p total, notper eye, so you should just need something capable of pushing 1920x1080 at 60fps. That will be divided into 2 eyes of 960x1080 at 60fps. I think you will want rather high FPS as I believe it helps to alleviate nausea.