Updated CPU For 360 Next Year
Next Generation reports that Microsoft has already lined up a new CPU for their next-gen console. Production with the new chip should begin next year. From the article: "Singapore-based Chartered has been a supplier of less-advanced 90nm SOI CPU products since the Xbox 360 console launch. By implementing the newer 65nm SOI technology, the system's transistors will retain less charge, allowing the microprocessor to operate faster."
Consoles don't usually change their cpu speed, but it will probably run cooler.
By reducing the number of failed starts, the cost of each chip falls. By reducing the amount of silicon involved, power demands fall. Both of those reduce the cost of the console.
As others have pointed out, don't expect to see a speed increase from this process change. Instead, this will allow for more stable and cheaper consoles (cheaper for Microsoft; who knows when they'll give us a price drop?).
What does proprietary vs. non-proprietary have to do with it? The original Xbox was "proprietary", even though it was based on standard parts (the CPU was a one-off design, the GPU was a one-off design, and everything was surface-mounted. You couldn't swap the CPU, GPU, or add more memory unless you were awesome with soldering). Anyway, you do realize that the original Xbox went through eight different "versions" ("revisions" may be a better word), right? Aside from getting screwed with a Thompson DVD drive (the version had little bearing on what drive you'd get, but that Thompson drives stopped shipping with later versions), all versions work exactly the same. In fact, the only reason you'd care about what version you have is if you need to do repairs yourself and need specific parts, or if you want to mod the box and need to make sure you get the right modchip package.
More importantly, this kind of product revision has always happened with consoles. Even Nintendo did it, way back with the NES. Sony does it, and obviously Microsoft does to. Expect to see a number of revisions of the 360 over the years, and unless they really screw something up (like Sony did with the PSTwo revision) you should expect all consoles to be equivalent.