I just happen to be in San Jose for NVIDIA's editor's day and got a chance to talk to Nvidia about the PR that they released on the next generation Playstation.  Nvidia said that they have some of the best engineers working on the next gen console (they have 2500 total) and that the graphics quality will be beyond that of what the Geforce 6 series is capable of handling.  Know we just have to wait and see what Sony sets the price of this new console at! 

Sony and NVIDIA Corporation today announced that the companies have been collaborating on bringing advanced graphics technology and computer entertainment technology to SCEI's highly anticipated next-generation computer entertainment system. Both companies are jointly developing a custom graphics processing unit (GPU) incorporating NVIDIA's next-generation GeForce and SCEI's system solutions for next-generation computer entertainment systems featuring the Cell* processor.