Microsoft's Xbox 360 goes 65nm: Falcon Dissection and Power Consumption
 

Die shrinks are big deals in the PC industry; transitioning to smaller manufacturing processes means faster switching times and greater transistor density, usually resulting in cooler, faster and more feature-filled CPUs and GPUs.

Intel just recently began its transition from 65nm to 45nm transistors with the release of its Penryn based Core 2 CPUs. The benefits of smaller manufacturing processes are made clearly visible by the Penryn example; despite having 50% more cache than its predecessor and more features (e.g. SSE4), each Penryn die measures 107 mm^2 compared to a 65nm Conroe at 143 mm^2. Transistor density also went up tremendously, as Penryn crams 410 million transistors into less space than 291 million transistors with Conroe.

http://www.anandtech.com/gadgets/showdoc.aspx?i=3152