Man, I just know I'm gonna get flamed on this, but as a long time lurker, I just gotta say a few things.
First, what's the big deal if Oblivion DOES look better on a high end PC? Some people like to spend thier money in different ways. Would ANY of you deny a ride around town in a Ferrari would be more fun than the same ride in a Kia? It's not always a linear progression. Sometimes you have to pay more than twice as much for even 10% increase in performance.
I've been checking out the Xbox 720(because a mate of mine had to buy TWO before getting one working one!) and it's a good system. It's the closest the console market has EVER been to the PC, but if people seriously think the major component makers are going to alienate thier $400 video card buyers by letting a $400 SYSTEM trounce it, you've really got a lot of reflection to do. ATI and Nvidia would face HUGE backlash if they ditched the PC market for consoles. Why do you think MS and Sony are both having PC chip makers do up thier graphics solutions now? They know that the PC will always be the cutting edge if only for the fact you CAN upgrade a PC to some extent.
Why not just say it how it actually is, rather than what people wish it was. The Xbox is the winner, hands down, in the "bang for the buck" category, but like any console aimed at the mainstream(anyone remember Neo Geo and it's niche marketing scheme?) it is a compromise. If you're willing to pay for the latest and greatest, you'll be besting consoles with ease.
The last note, lets not forget that some PC users(I know, maybe one or two) use thier PC for things other than gaming. I myself get to write off most of my PC as a work expense, so I get a large HD, a gig of memory, OS, and a 3800+ for half price! I can fork out $400 for a video card and I have a system that not only does all the crap I need for work, you know, spreadsheets, documents, VPNs to the office so I can work in my jammies, and I'm ahead of the game! If I were to go on my own budget, well, I'd probably upgrade video cards every other year, but buy the top of the line. You saw the "mid level" PC was a GF6600. That goes for what? $100! Why not buy two and SLI them, now you're looking at $100 for the MB, and $200 for the video cards. Drop in your two year old Athlon 64 and whatever memory you've got from your old PC, and you can upgrade your moderately spec'd machine to do better than the Xbox for $100 less cash to pony up.
If you don't have anything to reply with but my number of posts, save yourself some embarassment and just don't reply. We all start somewhere.
I'll don my asbestos underwear now!