Okay, lets break all this down...
Lets start with Japan.
In Japan, the 360 factor is realatively negligable. Its a battle between a 250 dollar Wii, and a 500 dollar PS3. Yes, the PlayStation name may mean a lot, but that sure didn't do a thing for Nintendo when they lost their grip on the consol (ahah julius ceaser last consol... i crack myself up) market. To top all of this off, the DS is allready on fire over there. So I really don't see a reason that Nintendo can't win in the land of the setting (rising?) sun.
In America though, the 360 isn't something to shrug off. It will have several (probobly not 10) million consols allready sold before the wii and ps3 set foot here. the price gap between a 200 dollar wii and 300 dollar 360 isn't the same gap between that of the PS3. Not to mention, in America people seem to care a lot more for their graphical fix, and wouldn't mind the eye-candy of the wii's opponents. Ultimatley the wii could get high up in the market by getting new people to play, and satisfying the plebians with an affordable consol (no roman joke intended). I still think that the 360 will most likley take the market over here, maybe not by much, but I think M$ has gotten their act together.