Im pretty sure they can create (from scratch) a version for the 360 that you can download from LIVE. Like, you can have video convos on the 360, so theres the video and audio over the net done. Next is just inputs which is the basis of all online games. So if they are smart they should be able to do it no prob. (Waving the bandwidth issues that any console/pc doing this would have.)
Hardware wouldnt be an issue, i mean if you think about it, most gamers that play COD4 and such have 2-3ghz Core 2 Duos, and thats rendering the game and all other AI, etc. Im sure a 3.2ghz Tri Core can handle streaming, + inputs.
Would one agree?