It's due out in autumn 2005 but hard drive and backwards compatibility are in doubt
Microsoft have started to discuss early specifications of the successor to Xbox with favoured developers. Xbox 2 looks likely to be released in autumn 2005 - and, alarmingly, it may not be backwards compatible and possibly won't feature a hard drive.
It appears as if Xbox 2 will only include a hard drive if Sony decides to include one in PlayStation 3. Otherwise, the console is likely to just make use of memory cards (although there have been rumours of an external hard drive add-on). The main issue here, of course, is where this would leave downloadable Xbox Live content, such as new game levels.
News source: gamesradar.com