This is not a new console. Let me just get that out there. A recent article from TGDaily expressed that a newer and smaller 45nm chip is in production which will allow for a more compact Xbox 360, dubbed Xbox 2.5 or 540 buy the fanboy masses. A fervor broke out that a new console was coming and we would all be shit out of luck. Turns out, that is not the case. Here is what was said:

A more dramatic and perhaps visible change will happen next year: TSMC plans to begin producing the Valhalla chip, which will be the foundation of the mid-cycle refresh of the Xbox 360, thus called ‘Xbox 2.5’ or simply ‘Xbox 540’ (360+180), in fall of 2009. We learned that this new chip is apparently much more than a die-shrink and end up as a system-on-a-chip design. This change is likely to enable to redesign the Xbox 360 casing and go towards a slim-design, much like what Sony did with the Gen1 and Gen2 PS2. We believe that TSMC will use a 45 nm process for this Multi-Chip-Module package (CPU+GPU+eDRAM).

Your 360 will not be defunct nor will you be forced to buy a new console. This is akin to when they made the slimmer PS2. This should help to end all the overheating issues that plaque the console, although is does absolutely nothing for their current fan base. If your machine died and you received a slimmer Xbox 360 in return, well, that would be fantastic. Will that happen? Uh, no.