The name is kind of odd, but Microsoft PR always have had a problem with counting/numbers. Windows 3, 95, 98, Me, 2000, XP, 2003... And Xbox 2 would have the horrifying problem that Playstation 2 has been out for years and years - can't be behind on the numbers, now can we?
Maybe Sony will call their next Playstation the 720? Tie it in with Tony 'Gluefoot' Hawk, and you've got a smash hit!
Interestingly, this new box sports a PowerPC-processor and ATI graphics chip.