E3 2010 had MS announcing a new 360 chassis. Smaller, black, and attracting more fingerprints and dust while supposedly becoming "whisper quite", the new Xbox will have 100% less red rings*.
[size=8]*Due to MS engineers fixed the problem by omitting the red LEDs in the controller connection lights on the console of the new system[/size]
The initial model has an internal 250GB removable HD, built in 801.11n 2.4Ghz WiFi, 5 USB ports, and a port to power the Kinect. Power usage has also been dramatically reduced according to early reports, probably due to the reduction in die size for the CPU/GPU and the consolidation of those processers into a single die.
There is a lot of discussion of the new Xbox in the "Official 2010 Microsft E3 Press Conference & News Catch-All" thread. I figured it would make more sense for future searchers to find most of this stuff in one dedicated thread instead of having to wade through various game, Kinect, ESPN, etc talk.
EDIT 7/20/2010: The Arcade has been announced. 4GB built in storage instead of the HD. Matte black finish. Will come by itself in August or bundled with Kinect later.
[size=10]Let me know if I need to update the initial post with additional information[/size]