The console transition discussion is interesting. I like Jeff's idea of some sort of game-engine "scaling" technology that could detect the platform and adjust the game settings accordingly, but I honestly don't see that being possible (any time soon, at least).
The problem is that console generations are not simply "more powerful versions of their predecessor's" as Jeff suggested. The Xbox 360 has a completely different architecture than the original 360, making it a very different machine to develop for.
For example, the original XBox had a built in harddrive. This meant that every game engine could be built from the ground up to take advantage of the harddrive. Not so with the 360.
Because Microsoft decided to release a version of the 360 that had no harddrive, it means every single game developed on the console has to be designed from the ground up to work without a harddrive. This requires a completely different type of game engine, and presents a big challenge for developers compared to the generation before.
For example, Bungie had great difficulties leading up to the lauch of Halo 3. The entire Halo engine had been designed to work with a harddrive, which made Halo 3 a huge technical challenge. Halo 3 came very close to needing mid-level loading points. It took massive engine modification to make the game work in a similar fasion to the previous generation.
These kind of differences in hardware are common across console generations, and are just as common across different platforms within the same generation. The PS3 and 360 have completely different architecture. Just look at how much trouble developers have getting a game built for the 360 to run properly on the PS3..... most multi-platform games on the PS3 suffer from frame rate issues, longer loading times, fewer lighting effects, and lower screen reolutions. Yet PS3 exclusives are arguably the best looking console games.
I think that as long as there are different pieces of hardware being built by different manufacturers, developers will need to taylor games to specific technical designs.