In an interview a while back they said that the PSU would be external for size and heat reasons.... this was AFTER E3 when all the pics of the 360 with the 3 prong connector on the back...
So I guess now it's confirmed.
Thinking about that kid... he might not be screwed... I mean what did he show us that we didn't already know?
If his father was allowed to take a 360 home for beta testing then they would HAVE to know that his family would be using it too... so they probably made them sign their own NDAs, if not then it's MS's own damn fault.
The one really stupid thing the kid did was say his father's job title... the fact that he's a new hire and they know the job title, they could easily figure out who it is.