I still don't think Sony is going to drop back to 2007, but I guess we'll see. We've already seen examples of games in development, from E3 to the holiday season, there's almost two years to work with... I can see how the company might not make an early 2006 release, but I say PS3 will be available in Japan and North America by the end of 2006.
And yes, I do think both Nintendo Sony should have been ready to launch almost any time in 2006. Microsoft has been telling people for over a year that Xbox 360 would launch in 2005, Sony should have taken that seriously. I know that at this point its too late for Sony to change the launch of PS3 by more than a few months, but it should have been ready. Maybe it won't matter, I've heard a lot of negative opinions about Xbox 360, but then again, maybe Microsoft will grab up 10 or 20 million users by the time Sony and Nintendo launch next year.