If there ever is an Xbox 720 then I should imagine it will forsake the idea of gamedisks for online downloads and maybe using USB flashdrives. It will probably be very small but who knows?
Why 720? I think they should just stick to Xbox 360, it's a catchy name. And just keep upgrading it until they have make a completely new console. Including a new name.
I read in artice that only the people working on it know and the compaines themselves. It said Xbox720 and PS4 would maybe be released around 2014 0r 2015. Depending on how baly they need it and if thier products are still high in demand.