Even though Wii is obviously disrupting the market and is unlikely to not sell more than the other 2, Xbox 360 is also disrupting the high-end sector, a sector that is now, by default, a market of high-end niche technology hubs. Xbox 360 is cheap for and considered on par (bar software) by many consumers who this kinda product appeals to.
PS3 is being displaced and disrupted. Its market is now minimised by alternatives. Instead of having competion from simply a weaker similar style of gaming entertainment (GC and Xbox) and the typical cinema, book reading, watching TV (etc), it has the Wii as a new alternative paradigm of entertainment. One which has mass apeal and has disrupted the market.
It's NES all over again. Sony can win over MS with software, Blu-ray (if it get's an significant momentum going) and brand strength/promotion (among other more minor things). Xbox 360 has momentum coming this year with lots of software that appeals to masses of their smaller disrupted market (thanks to Nintendo), has a lower price point, and already has an installed base and great third party momentum. If MS pulls a good year, and PS3 doesn't have a forecased boost for 2008 from Blu-ray adopters (that also NEED to be interested in buying games), a lowered price, or upcoming titles that can make it win over 360, then Sony will have little chance of turning it around and will thus lose the console war (unless, of course, the market changes significantly for whatever reason; like our culture changes to being lots of core gamers and tech savvy people who find 360 and PS3 technology and its uses as seemless - unlikely, however).
This year is very interesting. This will likely be Wii's second smallest year (behind 2006) for a long time to come (until the cycle is disrupted by new formats). Also potentially PS3's biggest year, or close enough (yet still not a big year). Same with 360.