And please do get facts straight, jzdziarski. IBM does NOT have 3 GHz chips ready for the Xbox. They _plan_ on having them ready. People are, in these intel-switching days, often mixing things up. They're talking of dual core PowerPCs, where none are available, but at the same time talking 32bit intels, where 64bit chips _are_ coming well ahead of Apple's switch in 12 months. IBM's _not_ shipping the chips for Xbox yet, AFAIK, and the Cell processor is not aimed at low-power-consumption computers (and is not available yet, either).
The talk is that IBM wanted more money from Apple to further develop the PowerPC (I guess they felt in a good position seeing Microsoft and Sony getting onto the PPC bandwagon...), so it was rather a question of money than bad negotiation by Apple. AFAIK, Steve didn't even negotiate when that happened, he just looked at prices and roadmaps and made the right decision. So I guess yes, it's the ego, yes it's the roadmap, yes it's the bruises (3 GHz and notebook chip missing in action) and yes it's the sweeter grass on the other side... In the end, it probably doesn't matter. We won't even be able to directly compare 'new' PPC and intel chips, because Apple quite surely won't introduce, say, a PowerBook with a new intel chip and a new PPC chip at the same time. Instead, when a line goes intel, the move will certainly involve a performance increase (compared to when they were last updated).
And later, we probably won't hear much about the PowerPCs, anyway. The Xbox PPC will _stay_ at 3.2 GHz for about two or three years, same might be true for the Cell (although that one might get used in other products than the PS3, and thus have a need for further development). Freescale's processors aren't talked about much - besides current PowerBooks and iBooks - and probably won't see desktop/notebook computers from the inside much, after Apple moves to intel.
The primary reason for Motorola and IBM to push the PowerPC as a desktop and notebook processor was Apple. Motorola's main direction was the embedded market, IBM's the big iron servers (POWER Series), the game consoles as well as the embedded market. It was a bit like slapping dead horses.