I guarantee you that the extremely linear structure of FFXIII was not brought on by the limitations of the 360 hardware, but if by anything, the limitations of the design team.

Think about any Final Fantasy game you've ever played. With the exception of a few deviations you could make on the overworld, you enter a location, fight a boss and move on to the next location, in a very fixed order of progression. There was always the illusion of freedom with sidequests like Wutai (FF7), but as far as the game structure was concerned, you fight boss A, then B, then C, in that order. You, as a player, have no choice in this.

The fact that FFXIII is being called extremely linear just means that the design team decided to do away with the conventions that, well, for lack of a better term, held the series back from being the story driven epics that Square wants them to be.

What's really amusing is that Square is desperately trying to figure-out what makes North American, specifically Bioware, RPGs so popular. They'd like to know because Mass Effect 2 and Dragon Age are putting FFXIII to shame in terms of sales. The problem is they'd have to restructure their entire idea of what makes a "good RPG" in order to do this.

The difference basically boils down to this:

RPG vs JRPG

The RPG is what Bioware makes, and is based on the Dungeons and Dragons concept of; you create a character, and that character is an extension of you, the player. Your actions have consequences, and can drastically affect the final outcome of your game.

The JRPG is what Square makes, and is a heavily directed narrative that the player has little to no control over. The main character is pre-determined as are all of their major responses. The game never changes the more you play.

Neither of these are wrong in terms of game design, but you can clearly see the appeal of the traditional RPG, where you become the character as opposed to watch them.

Jesus, this was way too long.