Yeah, with all the reversals, the differences are disappearing quickly. The only thing preventing them from matching Sony is price is the fact they would probably lose money on their console at $399, where as Sony would be making money on theirs right off the bat. However, Microsoft has a lot more operating income than Sony, so they might be willing to take a loss just to be in a better position to compete with Sony for customers.
I don't know, though, but I know this conference is going to be fun as hell. Sony is focusing on PS4 and Vita with new games, Microsoft has new games and there's all kinds of rumors swirling around both of them. I can't wait.