I don't plan on getting an XBOX 360 until all of the below criteria are filled.

1) XBOX 360 gets a much larger HD. Lets face it, XBOX 360 has a tiny HD right now compared to the PS3, and it's simply not feasible to use it as a DVR and a gaming system if you can only store such a limited amount of data on the system. You will be micromanaging your HD space if you plan on downloading content from XBOX live while recording TV shows.

2) Built in HD DVD Player. The value of XBOX 360 just isnt there at the moment. If you're paying $400 for the Xbox and another $200 for the HD DVD player, that's a PS3 right there, minus the PS3's HD size and other features, you're looking at LESS value than the PS3 with a bigger footprint in the living room. That is undesirable for many people. 3) Sustainable, stable, high bandwidth, and 99.999% uptime on your internet connection. With a converged solution like IPTV, if your internet goes out, so does everything else. Imagine if you have VOIP and IPTV, if the internet goes out, that's it. No TV, Phone, or Internet. Right now, the Internet in my area is constantly going out, and if I bet my phone and TV services on the connection, I'd be left flapping in the breeze for weeks at a time.

IPTV's bandwidth usage may also present a problem. For IPTV to be competitive, it needs to be able to broadcast very high quality pictures while not jamming up your bandwidth. The provider will need to install a incredibly consistent and efficient QoS system in order to maintain the quality of video and audio output. Lets put it this way, you only have a limited pipeline, and for the hardcore computer users, that means you're probably already maxing out your bandwidth usage fairly often. Now, you have IPTV consuming a large portion of your bandwidth, which will slow your other downloads down, and worse yet, if your maximizing your bandwidth usage and the provider has a poor QoS system, you will lose audio/video on your TV signal. Most early adopters are going to be falling into this heavy computer using category meaning the problems of IPTV will plague them the most.

Many people know how much Vonage sucks with the quality of their calls and what happens if you use the internet while on the phone, IPTV will be MUCH MUCH worse before it gets better.

EDIT: 4) HDMI Output. A nextgen console touting Full HD without HDMI output is simply not going to be competitive. Imagine a computer without a DVD player, or a kitchen without a sink, that's the XBox 360 without an HDMI output.

Once Microsoft puts these things into the Xbox 360, even if they price it at $600, the same as PS3, I will still buy one.