Interestingly enough is the fact that Sony's PSP has been repeatedly delayed in Europe and is currently scheduled for a Septemeber release. Push that back a month or so and you may have some direct competition. Obviously, Sony wants to get the aging PSP into the hands of European gamers as the handheld has been out for some time now in the US and Japan. However, it will be a tough choice for many a gamer seeing as the price point is about the same. For my money, I'd take the console any day.
There is no prognosticating, as of yet, regarding whether Microsoft can continue to pump out the console or if we'll see shortages after the initial shipments. We do know, based on anecdotal evidence, that many retailers are no longer accepting pre-orders of the Xbox 360, or have stopped taking pre-orders for a period of time (story).
Oh, the times they are getting exciting! Only a few months to go!