A recent post on the A9VG forums has led many to believe that what you see above is the new "Valhalla" motherboard for the Xbox 360 console. Underneath that fan heatsink is supposedly a CPU/GPU combo chip that will allow for the overall size reduction of the board.

Sony was able to breathe new life into the PlayStation 3 when the company released a slimmed-down version of the console back in September, so we'd imagine Microsoft is attempting to follow suit. We'll speculate that this "Xbox 360 Slim" will go for the same price as a current Elite ($300), which itself could see a price drop when all is said and done.

Follow up:

To make things even more interesting, Engadget points out that Microsoft is currently hiring a motherboard design engineer for the Xbox 360 Console Development Team, so whether you want to file that under coincidence is up to you.

We'd imagine E3 would be the perfect forum to announce a console redesign, but judging by these preliminary pictures, we may just be seeing mock-ups and prototypes come June.
Would a slimmer Xbox 360 be enough to convince those without one to pull the trigger on a purchase? Let us know by sounding off in the comments section below.

10 Things We Would Like Different With The Xbox Slim:

Built in Wi-Fi
Arguably the most disappointing omission from the current line of Xbox 360 consoles is the lack of a Wi-Fi adapter, especially since both the Nintendo Wii and the PlayStation 3 both include the feature. This should be a no-brainer addition to the new Xbox 360 Slim, and we'd be surprised if it didn't include one.

Quieter operation
Anyone with a launch Xbox 360 knows what an airplane taking off in their living room sounds like. This next Xbox 360 needs to operate much more quietly than before. Sure, the newer Xbox 360s do a better job at keeping the noise down, but if Microsoft can match the dull roar of the PlayStation 3, we'll be content.

Get rid of the power brick
Probably one of the least-talked about headaches of owning an Xbox 360 is finding room for the absolutely gigantic power supply that connects the console to an electrical outlet. We're hoping Microsoft figures out a way to incorporate the unit inside the console's form factor this time around.

Quality control
No one will ever know the exact fail rate of the initial production run of Xbox 360s. Regardless of the numbers out there, we all know it was way above acceptability. Newer consoles do seem better at controlling heat dissipation, so the Xbox 360 Slim better be reliable. Let's hope the "red ring of death" becomes a distant memory.

Improved cloud support
With a slimmer Xbox 360, we'd love to see a heavier concentration on cloud-based game saves. As it stands now, gamers can transfer their profile and gamertags via a 10-minute download process, but we'd much rather there be a quicker way to access game saves from any console in the world.

User-replaceable HDD
Anyone with a PlayStation 3 can purchase their own hard disk drive (HDD) and install it--quite easily--themselves. We'd love the option to be able to do that with an Xbox 360 instead of having to lay out some serious cash for proprietary first party drives.

USB improvements
In light of the recent report saying a new Xbox 360 update will allow USB drives to work as added storage, we'd love to see more USB ports on the Xbox 360 Slim. At the very least, doubling the front slots from two to four would make attaching peripherals, drives, and other devices that much easier.

Blu-ray movie support
All right--we know this one can be filed under "pipedream," but if Microsoft was somehow able to incorporate a Blu-ray drive in the Xbox 360 Slim, it would certainly make for a compelling purchase. Rumors of Xbox 360 Blu-ray support have come and gone, but if there was ever a time to add such a thing, this design refresh would be it.

Slot-loading drive
From scratched discs to reports of games getting caught inside the console, we think Microsoft should just abandon the whole tray-based design and go right to automatic slot loading. Both the Nintendo Wii and PlayStation 3 make use of the technology, so it's time

Microsoft got onboard.
Netflix support for Xbox Live Silver members
Sure, this feature doesn't need a console refresh to be implemented--we just think anyone with an Xbox 360 and Internet connection should have access to Netflix streaming. PlayStation 3 has it and the Wii is getting it; not to mention it's a free pack-in on plenty of standalone Blu-ray players.

Courtesy of www.cnet.com