With the last PC spec (PC 2001 issued jointly by Intel and Microsoft) came the footnote that this would be the last joint spec. From here on out it is up to Microsoft and Microsoft alone to issue PC specs. This is already history.

With XBox, Intel tried to hang tough, so Microsoft went and based the design on an AMD chip. Only by giving away the farm was Intel able, at the last minute, to get the XBox back from AMD.

No, Intel is totally defeated as far as Windows PC specifications is concerned. What they want just doesn't matter (why do you think they're backing Linux?).

As to retail upgrades - they will be a dead-end line. To meet the requirements for "protection of copyrighted content" Microsoft is negotiating with the RIAA/MPAA, they need to get rid of all existing PCs. The current Windows line will probably be enhanced for retail upgrades one or two more times (to bring in revenue), but upgrades will be missing much of the new multimedia capabilities because old PCs can't meet the "content protection" requirements.

The pressure will be to upgrade to a new PC to get the latest Windows.

Remember where we're headed, anyway - Microsoft Windows on Microsoft hardware. XBox is just the begining. In a few years Microsoft will be able to dictate to consumers exactly when they have to go out and buy a new PC. They'll issue a couple of backwards compatible upgrades, then declare one that requires new hardware.