I think it was already "basically confirmed" that the early Durango dev kits are using two 4-cores Xeon.
I remember Proelite stating that maybe a few cores will be replaced by different hardware in the more advanced dev kits / final hardware
Yeah, this is what I've been hearing 2 quad Xeons running at 1.6GHz double threaded.
Thing about Intel CPUs is that hyperthreading can be disabled, those threads still being there means most likely that Microsoft is targeting a 16 thread console, and since I very much believe that they are using a custom AMD CPU, this would mean 16 cores for XB3.
Between Kinect, OS, possible background DVR functionality, all while gaming... They will need a hefty CPU for these tasks, and this is what the leaked PDF pointed to 2 years ago. It's also interesting too because they planned to keep Xenon on board for backwards compatibility, which could technically be why this CPU is so custom, if they integrate it on a MCM or even on die as AMD likes to do, I could see it being a very complicated, custom CPU. That last part is speculation based on an early rumor, but if they did do something like this, they could certainly have a monster CPU that AMD couldn't simply match by throwing more cores at it for Sony.