Rant time! :-D
Remember- "640k ought to be enough for anybody?" I really believe that if the space is available, then technology and software will develope that require it, giving us better graphics and longer games. That's why I'm shocked that Microsoft is not going to use the HD-DVD or Blue-Ray formats. If Sony has the extra 16 to 41 gigs per disk to their advantage, they will use it! Maybe not right off the bat: I would suspect that the release games for all next generation consoles will look only slightly better then their previous console systems. However, as more and more games are developed for each system, they will more efficiently utilize the hardware and media formats.
I have evidence to back my opinion up:
Compare Halo to Halo II. Now, of course, Halo (as a release title) was absolutely nothing to scoff at. However, compare that to Halo 2. It looks like high school compared to elementry school: all grown up. Okay, bad analogy, but you catch my drift.
My point is that the programers slowly learned how to take full advantage of each console. This is why I think that the PS3, using a newer and more efficient media format, will eventually be revealed as the superior console (assuming the specs remain as they are).
Both machines use absolutely awesome processors. Well, actually, Microsoft isn't using an awesome processor... they're just using 2-3 Pentium 3.0 gigahertz processors. Kinda the lazy way out if you ask me... how are they going to keep it under $250? Okay, regardless, both machines will have very powerful specs. The Playstation 3 will be using an unbelievably efficient 4.5 gigahertz cell processor, which works kind of like a computer cluster. Microsoft is using the 2-3 processors. Both are capable of teraflop performace. Both (I believe) have 256mb of RAM (which doesn't sound like a lot, but keep in mind the XBox only has 64mb). I don't know that much about the next Nintendo system, haven't done my research, so I can't comment on that. Microsoft will be using a standard DVD reader, while Sony will be using Blue Ray. I feel that, in the long run, Sony's console will be shown to be more powerful. The future is yet to be seen, but I'll be putting my money into Sony when the PS3 is released.
(Yeah, yeah. I know: it's not the specs that matter: it's the games. I know that, and I feel that both have equally good games, so don't bother to tell me that. I can forgo Halo 3; I won't miss it.)
Well, I guess I'm kind of glad Microsoft is going to go ahead and use old technology: it gives a lot of the tech nerds a reason to NOT go with the software giant that hurts the market place. I'm glad the next console will completely integrate with XBox Live: when people get tired of paying monthly for the priveledge of simply being able to use their toy, they'll migrate to other companies. (I base this on the fact that Microsoft charges for their online service while Sony's has always been free. By now, they will see what a selling point it is, and probably have an equivalent... maybe free? Maybe, maybe not. Either way, Microsoft will be charging for theirs, so even if Sony's isn't free, they'll be on even ground.)
Wow... that was a really long post. Time to go back to my Calculus!

Cheerio!
- Greg
EDIT: Basically, I'm agreeing with what Achilles3 said... lol.