At the Seattle Gamefest, Microsoft Hardware manager Robert S. Walker said they were looking at modifying "the right analog stick on the controller to make it more conducive to the precise movements used in shooters and various other genres." This is great news, since it's really a bitch to aim with any kind of precision using an analog stick instead of a mouse. Plus, Microsoft says they've got no plans at all to bring a mouse and keyboard to their console.
This new controller won't replace your two-stick, one-d-pad affair, but will be used as a supplmental controller for FPS games or games where you need more precise control. Think of it as how a driving wheel would be useful in PGR, but would get you owned by zombies in Dead Rising. In our opinion, they should just break down and make a keyboard and mouse controller for the 360, then charge $99 for it and make a killing.