Crafted items will tailor their stats more to the class that crafted them, and class items will be more likely to drop for the class you are playing.
Recently, a group of select Diablo III fansites, including Diablo Fans, were invited to Blizzard's headquarters to check out the soon-to-be-released console version of Diablo III. They discovered lots of interesting information about itemization in the PS3 and Xbox 360 versions, in particular, you are much more likely to get gear that you can actually use, and drop rates seem to be considerably higher across the whole board.
Two of the most important changes are that crafted items will tailor their stats more to the class that has crafted them, and class items will be more likely to drop for the class you are playing. White and blue items will also drop considerably less, vendors are much more likely to sell Rare gear, and Artisan upgrades cost less gold. Drop rates for legendary items also seem to be substantially increased; the 5-6 fansite attendees at Blizzard HQ managed to find a total of 3-4 items Legendary items on Act 1 Nightmare in one hour.
It was also revealed that initially, the Console version was also supposed to be online-only, but Blizzard's research showed a huge part of the Console population didn't have an Internet connection. Perhaps Blizzard should have shared that research with Microsoft before it shot itself in the foot? Blizzard says that while there are anti-dupe mechanisms in place, it knows they'll eventually be overcome, just like in Diablo II.
As for the co-op mode, you can play on a single screen or online with up to 3 other players and also do a combination of both.
The PS3 and Xbox 360 versions of Diablo III will be released on September 3rd.
Source: Diablo Fans