Ah, console evolution. Each new generation moaned about "limitations" of the past, then proceeded to spend 90% of its power on graphics management and 10% on gameplay.
Before the X-Box console games and computer games were largely two different worlds. Consoles were for little kids, made in Japan and the games were usually simple, while older/smarter kids and adults used computers and played games made in the west, and there was little overlap. But with the X-Box things changed, and suddenly developers had to work with the limitations of the X-Box. Instead of the large, unlinear levels of Thief 1-2 and Deus Ex, we got the small, cramped levels of Thief 3 and Invisible War, for example. But kudos to Bethesda for managing to fit Morrowind on the X-Box, though.