Microsofts presidant is watching the handheld war Carefully. Rumor has it if Nintendo Fares really well with the DS. And sells around 10 Million Units Before 2005. Due to the fact that Gates says Nintendo & Microsoft are both about just as powerfull as eachother he wants to see how Nintendo fares against Sony.
Rumour has it Microsoft is thinking of Developing
The XH ( Xbox Handheld)

Which will most likly launch around 2008. So will there be a handheld X-Box.