Yes, absolutely.
I mean, take a look at some of the spectacular games that've come out on the x-box just these last few months. Splinter Cell 3 : Chaos Theory has got to be, hands down, one of the most beautiful games I've ever played. Forza Motorsports, which I haven't had a chance to pick up, is certainly living up to its' reputation as a GT killer from what I've read and seen.
The point is, the limits of the hardware can still be pushed. There is still lot of life left in the X-box console, unfortunately, Microsoft decided to compete head-on with the new PS3 and pushed up their next generation console release date accordingly. This is sort of a double edged sword for Microsoft, I fear. I mean, sure they'll get to compete with the king of all consoles, but at what cost? Do I need to mention the dreaded Thompson drive that was the bane to all X-box owners out there for a while? There's just so many things that can go wrong and pushing up the release date isn't going to help them one bit.
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