I'm late to this one..
...don't usually stray outside the GT4 forums, but I'm bored.
My take: The XBox360 seems like a serious contender, and I don't doubt it'll sell on its own merits, especially in the US. But the things that'l make it sell well in the US won't translate overseas.
As far as I've seen, the XBox's strengths seem to be FPS's, online play, and sports titles, all fanboy favorites in the US.
1. Personally speaking, and from having seen the gaming culture in Europe and Asia, FPS's are best left on the PC. With the ease of assembling a non-branded PC outside the US (not pirated, mind you, just non-branded) that'll delivered higher framerates and details than the PS2 or XBox, as well as the abundance of internet cafes and the skydiving prices of Cable and DSL, most FPS players will stay on the PC. More games, lots of customizable content on download, and more competition. If you have an XBox outside the US, how do you hook up? If you have a PC shooter, you can hook up to users from ten different countries who are closer to you (less lag) and willing to play at the same time.
Microsoft's power online counts on having enough players close to each other to take advantage of the service. That's VERY important. If you have no one to play with, why go online?
2. Microsoft has some great sports titles, but the PS2 carries more titles that are Euro-Asia friendly (basketball and "futbol"). Microsoft REALLY needs to attract these guys.
Also, RPGs and RTSs rule the gaming scene online nowadays. The PS2 has some great RPGs, and even though they're not as vast as the MMORPGs all the kids are playing, they're close enough to encourage the kids (and we're talking pre-teens and young teens here) who make up the bulk of the market to step up to the console. That's another market MS has to target to gain more sales.
3. The Playstation killed the Dreamcast (
) and the N64 (
) with the sheer volume of titles available. As anyone could make a PS title, it became the default option for every developer. Microsoft may be trying the same attack, but unlike Sony, they can't guarantee humongous sales outside the US. Does it matter if you're saving $25-$30 a game if you could be selling two to three times as many? It's something a lot of developers will have to think of.... and very hard.
4. One of Sony's biggest selling points has to be the excellent standard controller and the sheer number of peripherals available for PS2s. We're finally getting peripherals for XBoxes (here in Asia), but not in the number, variety and cheapness of PS1/PS2 controllers (helps that the systems are compatible to some extent). And the backwards compatibility (that I HOPE Sony keeps) counts for a lot when building a fan base or aftermarket base.
P.S.: I've seen USB Dual Shock clones around... never since the original Nintendo gamepad has one controller so changed the scene in terms of gaming controllers.
Finally:
It would be sad if MS failed with the XBox. Choice is the right of the consumer. A Playstation monopoly would be bad for consumers, as that'd keep prices high. With three or four different console options out, it'll force Sony to stay competitive and keep developing.
At least with the sheer number of games developers out, we're never going to be out of choices when it comes to games.
I remember MS talking about releasing Halo 3 at the release date of the PS3 to hurt some of its sales. If Sony puts up a release date early enough to make Bungie rush its product, Halo 3 could be a poorly made game. 
