Some interesting bits I've heard.

Xbox 360 dev kits are having problems with devware and aren't delivering even
1/2 the power of the full hardware. It seems to be something they just can't get right.

This is causing problems obviously.

The other info is that most first gen 360 titles are in fact xbox titles with specular mapping, and why so many of the games in planning look like xbox 1.5. They ARE xbox, but modified a bit.

Oh yeah, all of the updates to the beta hardware is costing microsoft a ton of money.