I guess I shouldn't assume you've all seen this stuff, so let me provide some links: here's a shot of what looks like an E3 kiosk for the new system, and here's a shot (also from Engadget) of a wireless controller. You have, of course, heard that this controller will work with the next version of Windows. There are some things you might not have heard about it.
Here's another shot of an Xbox controller with a cord on it and no large, round button in the center - this is (I believe) some kind of ergonomic test version for the general shape. Even though they're both white, the "black" and white buttons have been moved up to the shoulders to compliment the (by now) standard triggers. Back and start also on the face to either side of the mysterious button in the middle.
Let's talk about that mysterious button.
Of course, in this picture we can also see the jack in the bottom, which (it seems clear to me) is the headphone jack for the headset, which implies that the controller itself includes all that logic internal to it. No pucks, at least that's my guess, and no need for top slots on the controller with the memory cards being inserted directly into the machine. Back to the magic button thing: you can see numbers around the button very clearly, one through four, which I think is meant to nullify the one unwieldy element of the Wavebird - the goofy little knobs you turn to determine the channel. It's easy to imagine a light that illuminates the quadrant associated with the number when its in use.
But the button. Not a trackball, as we heard originally. I'll tell you what I think it does, based on how they do things and how other people have done things.
On the Windows Media Center remote, there is a "Windows" button that returns you to their primary menu. The PSP has one too, now - the "home" button - which returns you to the most fundamental state of the machine. It's a way to maintain the "brand" in the face of shifting content. The Xbox has the "Dashboard," but you can't get to it unless there's no game in - but they never really pushed the Dashboard like Jay Allard pushed "The Guide," the core experience of the Xbox 360, where you select playlists and manage shit. I wonder how far this extends - read that article to understand why I might feel that way. On several points they talk about liberating developers from having to manage things like user playlists - will this fundamental UI handle all such functions? Will you go there to manage friends or whatnot, in all games?
I will be very surprised if the system launches with a wireless controller actually in the retail box - you'll always need a fallback position when you're talking about batteries, and there's a single port for a joystick right on there. Eventually, I can see a "wireless pack" happening, but not at launch.
(CW)TB