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The system will be based on a revamped version of AMD's R700 GPU architecture, not AMD's Fusion technology as previously believed, which will, as previously reported, out perform the PlayStation 3's Nvidia 7800GTX-based processor. Like the Xbox 360, the system's CPU will be a custom-built triple-core IBM PowerPC chipset, but the clocking speeds will be faster
I heard it will NOT feature any 3D enhancements BUT what i DID hear which seems highly plausible is a controller with a screen attachment. This will be used not only as a controller but as a separate system. It also allows for things that wouldnt look well/fit on a tv screen to be shown. The device is rumored to cost $70-$80 per device and will feature a touch screen. So its like a DSLite LITE.
I've heard rumors that it will be able to spit fire or rainbows, shower the world in blow-pops, and have the ability to summon Falcor... All with one note from the Ocarina controller...tech industry rumor mills are like old ladies' sewing circles, they come up with the most random ...yeah, i didn't think anyone would really get the Falcor reference...