What it should be
It should take what's great about the Gamecube and N64 and just add to it. Don't sell developers or cartoonize and games this time around
. Take a page out of Sony's book and re-hash all the big series of the past and innovate the games that didn't do so well in the past... and if they have a great new idea, put it on a whole new title instead of putting a franchise face on it so it can sell.
Nintendo should stop and look for or create at least one killer app in every genre. Popularity and sales aside, just make them for high scores. This gen they were confused over the fact that popularity doesn't mean as much as quality in hardcore gamer's eyes... but that's the past.
I think that N5 should be a gaming only machine again, but it should be a bit more like Xbox. I think with all the pirating going on a HD would be a dumb idea for Nintendo next gen, but they should have some sort of built in memory that has high quantities instead of the rip off memory cards they have. (1/8 of Ps2's memoryfor 1/2 the price) Online gaming is a must, if they don't step into the online gaming world with an iron fist the Nintendo Kingdom will fall. If the next gen starts as late as speculated, they may need to start doing more online now.
As far as specific game changes, Zelda needs to go back to the N64 style. If it ends up being crappy, well, us fans learned our lesson... but Nintendo keeping somthing that big to grow in our imagination is dissapointing. Seeing Link in SC2 didn't help euther, just made me feel worse about it.
Oh, last but not least, PLEASE dan't make a controller as crappy as Gamecube's again... If gamecube didn't get the worse graphics in third party games, it almost allways had the flat out worst controls. Compared to Ps2 and Xbox, Gamecube's third party fighting/wrestling games are unplayable.
now...
What it will be
If they keep the same mentallity they have this generation... the "if it don't make money, don't do it" and "popularity over quality" mentality... I think this console will out-class GCN but be a complete failure when compared to Xbox 2 and Ps3.
We may get some nice re-makes, like a GTA3 remake, or a MGS2 remake... heck, why not a Enter the Matrix remake while we are at it
. Due to the fact that the online gaming community will be at around probably 4-8 million next generation, I doubt Nintendo will follow it very strong. As long as they never veiw not going online as a mistake this generation, they won't fix it. I expect somewhere around 5 exclusive online games next gen, and the only ones they will truly back online will be the ones already popular on Ps2/Xbox (the sports games for the most part, and maybe a MMORPG)
I expect Sega to re-release there sports line up for the first two years of the generation again on N5, then again back out because the sales arent going to be on the level of the Ps3/Xbox counterparts. If GCN happens to be out the gates first next gen may god have mercy on Nintendo's soul. Take GCN's early line-up and pull out all of the ports and non-exclusive games, and that's how it's going to be for the first year leading up to Xbox 2 and Ps3's releases.
If I had to put money on it, I think that N5's success range will land somewhere between GCN and Dreamcast.