Wow, everyone's thinking so inside the box, the most out-landish desire has been 'a console that plays all current-gen software' - not even one that can handle all past software. Heck, people even just want a box with a disk drive and a traditional controller. Wow... console gaming sounds really fun, guys
No, I'm not hating on console, but to give them any point they need to be super-special awesome. Just using a few pieces of currently in development technology I suggest to you a 360 degree portable virtual/augmented reality games system!
Just think: all it needs are the cheap LED projectors that I heard were being developed for a future iPhone model and the IR sensor tech from the Wii mote or the motion detection capabilities of Natal.
Mount these into a single box and the magic beings to happen: motion detection or IR tracking of gloves and perhaps a pair of IR LEDs above the ears allows the machine to understand the precise position and orientation of the gamer and his/her limbs, and any peripherals required (gun, sword, bat whatever). The projectors could be mounted on the machine, with three extra to ensure no shadows, creating a complete environment that would surround the player in a room (dimensions or some sort of calibration system would be required), or alternatively the player could wear the projector around his/her neck, shining forward onto local surfaces for an augmented reality experience.
Replacing the projector with VR glasses would allow unintrusive augmented reality games to be played, highlighting other players, though accelerometers would be required to track a player's movements out and about.
Tie in force-feedback peripherals, including more developed versions of the vest that was around a couple of years back, and you could create a scarily intensive experience that could simulate reality at a VASTLY greater extent than would ever be possible with a box, controller and TV.
Of course, not everyone wants "reality" in their games, but the potential to create so much more sensory stimulation would open up BILLIONS of possible games, experiences, interactive movies - even non-interactive movies could be revolutionalised by access to more than the sight and sound senses. We are at the beginning of the 3D revolution in mass cinema - how long before all our senses are canvas for the work of artists?