http://www.dailytech.com/article.aspx?newsid=5591
Microsoft's "Zephyr" leaked to the press complete with HDMI, 120GB hard drive and 65nm processor
With Sony's PlayStation 3 knocking on the Xbox 360's door, it was only a matter of time before Microsoft made the move to make its year-old console even more competitive. DailyTech has already reported that Microsoft has been able to successfully pare down its costs associated with producing the Xbox 360, so now is a more opportune time than ever to release an update.
According to Engadget, the Xbox 360 v2 (codenamed Zephyr) should go a long way in making the console cooler by swapping out the 90nm IBM Xenon PowerPC processor in favor of a 65nm revision that has not been announced yet.
There is also a single HDMI port for full 1080p support -- no firmware trickery needed. Also on the way is a 120GB hard drive which would double the capacity of Sony's top-ranging PS3. There’s no word on if Microsoft has seen fit to quiet the banshee-like DVD drive, but we can only hope that the answer is yes.
Engadget's "inside man" tells them that the new console will be available soon. We'll keep our ears and eyes open during Bill Gates' keynote on Sunday at CES to see if he has anything to say about the console.