They should release better hardware at the same time if possible...
I mean, release early and they make the same mistake as Sega... release late and te make the same mistake they made the last two generations. Release at the same time, and they create a whole new mistake
Either way there is a reason to complain... all I want to say is, release any time, and if you have outright better games and hardware than your competitors you will do good. I would like them to try Sega's angle though. I know way too many people who would have purchased a DC before Ps2 was released is one more developer made games for it.... EA.
If they get out the gate first and have the best version of this yearly best-seller (Madden) people won't wait for Sony. If they come out of the gate with the same line-up as GCN, just with the time advantage, I think they would give Sony a much bigger run. GCN had a good launch, but games like Madden and THPS don't have the same effect when they aren't exclusive for a year
-EDIT-
Just as a late thought for ya'lls, when ou release late (like Xbox/GCN) you have to worry about exclusive games to carry you, release early and every game you have 1st-3rd party is exclusive. Get a high selling third party game out the gates (Like Ps2 with Tekken and Madden and Ridge Racer) and the crowd will follow.