Sup guys!
So now that we announced XNA, I am very happy to come back here and see what's up. I work on the XNA team actually, and have been checking out this site for a while. I think you've done very good work and I am quite happy to help out with XNA and your stuff.
So... to answer some of your questions
How hard will it be to port HazyMind Engine to XNA?Very very very easy. I played around with your engine a while back and converted it to XNA framework in no time. Can't find the sources I changed though ;( But I know I can do it again. Basically, XNA framework is more .NET style than MDX was. You pretty much have all the infrastructure you need to port yours to XNA. The one big difference is that XNA is NOT fixed function. But that's not a problem since you have a shader system running right now. Just need to make sure everything uses it.
The other part that right now might be annoying is that we don't have an .X loaders in the XNA framework. That's because we have something called "Content Pipeline" that is being developed now (won't be in this coming beta, sorry) that makes importing content from .X and .FBX VERY easy and provides runtime loaders for your code. Should be part of the beta after this one.
How much is Xbox live?50 US dollars/year is what Xbox live costs. The XNA subscription for Xbox is $99/year that is independant of the Xbox live. You don't need Xbox live Gold to get XNA.
Will this work nicely on the Xbox 360?Yep! We're doing all we can to make this as seamless as possible between PC and Xbox 360. We're getting quite good perf on the Xbox right now. Don't expect to build Halo 3 though

It's more along the lines of the Arcade titles... even the heavy ones. There won't be any Xbox live access through your code of course. But you can do System link if i recall correctly (I am not workign on the Xbox 360 side of the project).
Xbox 360 graphics not so good vs PCWell yeah! PC will always evolve past a console very fast

Just a fact of life. The Xbox 360 does pack a LOT of power though! I doubt your PC is a tri-core system

But really.. in the end it's all about the tools and framework that's available. We believe that we'll provide a very compelling and easy to use set of tools for making games on the Xbox 360 for hobbyists and in the very near future the professional developers. People were VERY excited about XNA in Gamefest last week. I think we hit the spot with a lot of our audience.
I'll be visiting here every now and then to see what you guys are up to

Have fun!