It seems like everyone is just talking about graphic power here...
Well, let's take a closer look:
The PS3 will be a heavily modified version of the PS2, which is a modified version of the PSX.
Same thing for XBOX and XBOS360.
Sony® and Microsoft®, they both primarily focus on graphics, and therefore their hardware is (and has been) more powerful than Nintendo®'s ever was.
Nintendo® did never focus on graphics or engine power - they have always tried to invent smoething new in entertainment techniques. And their consoles have been cheaper in production (because of not-so-high-end hardware), and therefore also cheaper for the customers.
I remember one of my friends told me, that the games, which are primarily developed for PS2/3/XBOX(360) are usually double as expensive in production as a game that is developed for the Ninteno® consoles.
And besides: If you really need all that power, get a quad-core CPU, grab at least 8 GB of RAM and a hand full of nVidia®'s Quattro™ graphic accelerator cards, switch them together in SLI mode and have fun

- Alhexx