X05 was awesome. It could have been even better, but it was a very solid show for MS and I'll tell you why.
1) Rare is back! I've heard nothing but positive impressions about Kameo from the journalists. Not only does it look great, but apparently it's very fun. Remember the old days when we'd get to play great platformers at the launch of a new console? Those days are finally back. Kameo is going to be huge and that little fairy will become one of the 360's spokespersons

PD0 has also received plenty of accolades from the vast majority of journalists that played it. It looks crisp, innovative and fun. Will it be as big as Halo was for Xbox? It doesn't need to be, thankfully, and it probably won't be, but it'll be BIG in it's own way.
2) It has the "oh shit, that looks hot!" factor. Many "next-gen" looking games from the get-go will entice lots of hardcore and casuals alike. PGR3, Kameo, PD0, Madden, Oblivion, GRAW, NBA 2K6, RR6, etc. etc. etc. And there's still about a month or more for games to be polished up a bit some more.
3) Best. controller. ever.
4) TONS of 3rd party support. Microsoft's 3rd party support from all over the world rivals even Sony's in many ways (japan still falls short somewhat, but still). There's so much 3rd party support that almost every genre is being conceivably covered with quality offerings and that's the other thing... almost every single game shown or announced for 360 looks to be, at worst, "B" games with many potential "AAA" games. Nearly 'TURD Free! OMG WTF!?! Nearly 20 launch games and over 200+ more games in development for '06.
5) Guaranteed big hits in the works: Halo 3, Gears of War, Too Human Trilogy, Mass Effect, Fable 2, Forza 2, Shadowrun, Ninja Gaiden 2, Marvel MMORPG, Crackdown, Banjo, Splinter Cell 4, Castle Wolfenstein, etc.