This holiday season is Microsoft's. If they could fix their RROD issues and make a 40GB SKU at around $350, they'd rape Sony so hard it wouldn't be funny. With their line up of software (CoD4, Halo 3, Assassn's Creed, Mass Effect, Bioshock) and great Xbox Live internet community functions, they'd push Sony out of the console business.
I think Microsoft and Nintendo will thrive this gen, with Nintendo being the dominant number one and Microsoft at a very comfortable second, because the way I see it, Wii60 is truly the way to go. Get your family gathered together around your Wii, and later you can bust out the 360 for online gaming and such. The PS3 doesn't really have a place, as it's too expensive and the software isn't there.
Microsoft has tons of 3rd party support, and Nintendo's first party games are second to none. With a 360 and a Wii, there's no way you can lose, TBH. If I was a developer, there's no way I'd take developing exclusively for a complicated console with a user base of about 5 million over a console with about the same abilities with a user base of about twice that. Sony fucked themselves up this gen.