Shpeshal Nick
aka Collingwood
I think MS is in for a rude awakening if they think Casuals will accept multiple SKUs each with different hardware. I foresee a lot of confused parents and pissed off kids come Holiday season.
This is why I think my proposal would work.
So all games would be the PC port with selectable options and everything and the game would auto detect your highest possible setting based on the parts in your console.
Casuals can continue to do what they do now, buy the console and play games.
Hardcore unhappy with "standard settings" can choose to upgrade the specific upgradeable parts within the box and the game automatically detects and sets the game accordingly to the higher specs.
Microsoft gets to release a cheap box that runs games at the bare minimum standard and let's the hardcore gamer foot the bill for more.
It's a win/win all round.