Today isn't so much about advice as it is a wish list for future hardware. Some older systems had genius ideas that were lost at some point that need to be brought back, others aren't taking full advantage of the evolution of tech.
Most of us remember the N64. One key idea that they had right was the expansion card, essentially an updated graphics card. This prolonged the life cycle of the console significantly in addition to allowing better games to be made, this feature isn't in any modern consoles, and it's not my place to say whether or not it should be, but it wouldn't have been such a bad idea for the xbox 360 given it knew that ps3 would have better graphics simply by waiting a little while longer.
It used to be that almost every game was run from cartridges and back then there was no "loading screen". The main reason we switched to disks were for higher capacity and cost effectiveness. Now with the new speeds provided by USB 3.0 and the significantly larger capacities it wouldn't be unreasonable to give it a try, because you never need to blow out dust from a usb or worry if its fitted correctly and it's remarkably cheap these days, perhaps not as much as discs which may be a downside, but it would allow for more content at faster speeds than disks and they take up much less space. I dream of the day we'll never see another loading screen.
This is about looking forward though. To that I must say that in about 4 years when we really start considering new consoles, perhaps slightly sooner for xbox probably 2 years, there should be advancements in input methods and content creation methods, and content sharing. The Vita for example could completely replace the dual shock controller and be your controller on the ps4, of course by then there'd probably be a new handheld and ideally for such a high price tag as I'm sure it will have then the console should come with one of these controllers that serves as a portable as well. Xbox could adopt such an idea, break into the portable market by including one with every new xbox as the controller for said box, and if they can somehow match graphics or get close to doing so then even have it so you can take your game on the go.
Then there's content, focusing specifically on the one thing that's always bothered me about console content, once you buy it, it's for life. Sad truth about this is that I honestly almost never play halo 2 anymore which I bought so many map packs for, or oblivion now that skyrim is out, and all that content will almost never get played again, and with game of the year editions out if I really wanted the content I could just grab a copy of those instead. The next iteration of consoles should include a system for gifting games, sharing games (temporarily loaning it to a friend) and optionally revoking my rights to a game or its content in exchange for some form of currency I can use on the marketplace for new games and content. I would love to revoke my claim to old map packs and content to get some points and buy an arcade game or get new map packs for newer games. I like to give gifts when I can spare it for a good friends birthday or christmas, and in the case of oblivion since I'd mastered it completely I gave it and the guides to a friend only to remember he'd have to buy the content like knights of the nine and shivering isles so I had to help him grab a game of the year, which he could turn around and sell back to the store if he ever got tired of it. A lot of these features such as gifting already exist on steam, and I like it sometimes when me and friends can go in on a 4 pack and get the game slightly cheaper. I might not be able for afford full price for one copy myself, but if my friends put their cash together we can save 10$ a piece sometimes and all get a copy. Then there's another nuisance that I'm sure will never be addressed, but it's the fact that a lot of games are multiplatform but you can only play them on one console for various reasons. It would be nice however if I bought a copy of the game on xbox I could turn around and play it on pc or ps3 through steam or similar without having to buy extra copies. Mass Effect was generous in this area by giving me an extra copy for pc, and for that I am extremely grateful, it did a lot to turn my views of EA, even if it was BioWare's idea (not sure but probably). BioWare was awesome enough to make sure that any DLC I bought for dragon age, dragon age 2, mass effect, etc I could get on any console or pc without any problems and I could get it for all consoles and pc if I wanted, which because now I had a pc copy of mass effect 2, and had bought an extra dragon age copy for pc I certainly wanted to do so.
One thing I'm happy to see recently that I was going to include here was that nobody makes controllers that can be used on both xbox and ps3, given that they aren't technically too different as opposed to the wii controler which is wildly different from either. As I said though, recently I've begun seeing such controllers around and that makes me very happy, now they just need to get it down pat. In my case I unfortunately have friends that sometimes don't use common sense, which means they spill liquids on my controllers sometimes and sometimes I can't fix the problems that come from that. However because they are cool enough to replace what they break I have parts to play with in the future. This one day lead to a stroke of genius in which I gutted a ps3 controller and more or less installed it in an xbox mw2 controller with the xbox buttons and sticks. After a lot of strenuous work and probably breaking several laws not to mention warranties I managed to get it to work with the ps3 flawlessly including plugging it in and charging when the battery gets low, something I've always wanted to be so easy on the xbox but instead of regular usb they insist on the play and charge kit which breaks after a while and has large battery areas that feel unnatural by my fingers. Through my efforts though I also managed to manipulate the controller to work on xbox as well, however sometimes the xbox freaks out because of it, and I never use it online because I'm fairly sure I'd get B& almost immediately. However when using it on the pc it's a lovely little item to have around and that gyro-sensor can be mapped to do some very nice things that you just don't get on regular consoles, such as leaning in call of duty.
Last but not least there's online premium services. PSN has always been free, granted it hasn't had many exclusives specifically shooters that make great use of it, but when MAG came out I was overjoyed that I knew I'd never have to pay to play online with friends. XBL however 60$ a year to play anything online at all, I rarely get discounts or freebies that silver members don't get, and I could just rant on it all day, the end point being that I have never once felt like I'm getting my moneys worth. PSN plus service however, I've already saved my moneys worth and I've hardly bought anything, tons of free content that gets updated regularly, and useful system features that I'm comfortable in the idea that I shouldn't expect them for free because they aren't necessary but are very welcome additions all the same. The PSHome experience is also much more mature than the childlike avatars we get on xbox with cheaper additions. Yet I maintain my XBL, not only for the exclusives such as halo or gears of war but because of the friend system involved and the better controller for shooters which is what I play most on xbox. However, if XBL doesn't do some serious improvements or somehow lets their exclusives start slipping I might actually end up cancelling. right now I would be happy to pay 30$ a year for XBL, and if they were to implement a cloud save system, automatic updates while I'm not playing, and various other features the Plus service has, I'd almost be happy for even a 50$ a year service. I love logging on to PSN to find all my games have been updated, latest system update, etc knowing that I won't have to ever wait to get into a game because it's updating. The Plus service I was worried about at first, and early on it definitely wasn't worth the money but now it's getting into a groove and I feel that it's money well spent, enough so that I bought several gift cards and plus service cards for my psn friends over the holidays hoping that they'll get hooked on it as well. Now if only playstation could actually get more exclusives.