Speaking of tessellation, I just heard that the Xbox 360 will employ a rendering technique called "mega meshes" that will supposedly take advantage of the tessellation unit that I never knew the console had.
Here's a tech demo.
I'm not sure if this is anything to really be excited about. AMD's in hardware tessellation unit in the Radeon HD 4XXX series of GPU's wasn't very efficient. To do anything meaningful with the tessellation unit in the 4XXX series you practically needed the raw computing power of Radeon HD 4850x2 or 4870x2 both of which are practically a full generational leap from Xbox 360's Xeon. I don't see how a tessellation unit on the Xbox 360's Xeon would be any different. Notice how lifeless majority of that tech demo was for instance. This may be too taxing on the hardware for the Xbox 360 to utilize this in any meaningful way in games.