Some information that may help you to better understand this whole Cell business.
PowerPC is an architecture just like x86. POWER and Cell are both PowerPC. The PPE is a brand new chip. It is not a POWER4 derivative like 970's (G5's)are. It does have some features from POWER5 like SMT though.
The Xbox 360's three processors are in all probability three PPE's. The PPE is a PowerPC processor probably based on some work IBM did back in 1999/2000 with the first processor to crack the 1 GHz barrier. i.e. it's simple, efficient at in order code and scales very high. IBM owns the PPE, when Microsoft wanted something they probably said, "Well we have this PPE thing that Sony-Toshiba are using for Cell's central processor, but we own the PPE itself and we're happy to customize it to your exacting specs" Microsoft adds a custom VMX (The VMX-128, the regular VMX is also known as Altivec) and you have a deal. Despite the fact that Xbox 360 is using the PPE, the rest of their system has nothing to do with Cell.
That's because outside of the PPE the Cell is joint intellectual property (IP) of Sony-Toshiba-IBM (STI). The SPE's, the broadband bandwidth, etc. With additional stuff from other companies like Rambus's Flex/IO interface and they're ultra fast XDR (Extreme Data Rate) RAM.
The PPE even with 8 SPE's is not suitable for Macs. Thats because while a PPE is roughly equivalent to a pair of of G4's (NOT G4+'s) at 1.4-1.6 GHz. The original G4 (7400 series) was a G3+Altivec. Modern G4's are G4+'s which are quite different from G4's. The reason the PPE matches a pair of them is because of SMT (Simultaneous Multi Threading, like Intel's Hyperthreading but a better design). G3's and G4's are fairly in order processors so code written for them (like the vast majority of current Mac code) will run fairly well on a PPE. However newer code written for G4+'s and G5's will not run that well since the PPE is poor at out of order code, has poor branch prediction, and suffers a fairly large branch misdirection penalty.
Apple has a bit of a problem with upcoming processors. The 970 series hasn't seen an improvement since the FX model, and both the GX and the MP are not on the scene yet. IBM seems to be unable/unwilling to make a low power laptop processor, at least until all process improvements are up and running at 90nm.
IBM's chip division uses a vast amount of the companies resources, but the return-on-investment sucks. Therefore they may have little to no interest in continuing to improve the 970's, or towards producing a POWER5 lite. Or Apple is unwilling to invest the money required for them to continue.
On the other hand Cell is going into probably a 100 million PS3's, and the PPE core will be in something like half that many Xbox 360's. Plus Nintendo is also using an IBM processor (could be a 970GX/MP if they come out, or a PPE, or a custom variant of either). Although Sony and Tosiba will be using their own fabs when they come online at 65nm, and Microsoft will be sourcing their PPE as soon as they find some 65nm fabs, IBM will probably be making a whole lot of Cell's/PPE's at 90nm and some at 65nm. Cash flow. Additionally if IBM also wants to win the processors for the next next gen systems (and I'm sure they do) they'll be investing lots of money in the Cell and PPE and derivatives while selling the improved models to as many people as possible to keep the cash coming in while they wait for the really big orders from the next next gen systems.
Therefore Apple jumping on a custom Cell will make IBM happy because it means moving upwards of 2 million Cell's a year for some time once all Apple systems are using variations of the Cell. Now say 6-10 million isn't a huge amount versus 200 million Sony/Microsoft/Maybe Nintendo but IBM won't be making most of those. Add in some workstation sales, and the money they've already made designing it for various customers and they should have plenty of money to keep working on the Cell/PPE for the next iteration of console wars around 2010.
Jumping on the Cell will make Apple happy because the Cell is going to have dozens of times the resources thrown at then the 970's or some Apple custom POWER5 lite (remember Apple is basically the only customer for 970's, IBM sells a handful in a blade server and that's it). I'm sure a beefed up PPE with more out of order and better branch prediction OR a few PPE's clustered together will make a fine future system once you toss in a few SPE's as well.
As to those pointing out Cell's size, yes it is big. But this is very first gen stuff at 90nm. Cell was designed to be built at 65nm but both Microsoft and Sony decided to kick off the next round before 65nm fabs are up and running so the first ~6 months for Microsoft and the first couple of months for Sony are stuck using 90nm with all the additional costs that implies.
At 65nm the Cell will be much more affordable, and the current die size should shrink with more engineering dollars. By late 2006/early 2007 Apple would probably be able to buy Cells running at 4+ GHz at 65nm with their own heavily beefed up PPE since IBM prides themselves at custom creations.
Although a 970MP or two would probably be able to match the performance at that point in time, going forward it would probably lose out real fast as it hits scaling limits (which the 970FX has run smack into right now) and the Cell climbs towards 6 GHz.
That gives Apple one to two years to begin rewriting/optimizing for in order code, and optimizing for those SPE's plus all the new internal bandwidth. Independent developer code won't see much of a hit or any depending on how beefed up the PPE(s) are and lots of apps will be able to benefit from the SPEs.
Anyway, that's my two cents.