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I watched the E3 press conference for it. PS3 has a similar project in development. It doesn't look as good as the xbox 360 (which has no controller, and facial recognition software) but still looks pretty cool.
Either way both will be Wii killers by 2011.
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I don't think that Xbox or PS3 will match the Wii experience. Nintendo is years ahead in development, and the Wii is more for everyone.
You know the big2 will make it work, but you won't get the pick it up and have fun element that Wii users get. Besides its more user friendly.