[on tangent] The GTA LC does boast multiplayer, a franchise first. Make it on-line play, and that should push some hardware.
Capcom's got a series of re-makes in the pipeline that they showed at TGS. There's the Mega man 1 re-make with really big heads, coupled with a level editor. There's the Mega Man X remake with what seems to be 3d polys in 2d. And finally there's the Ghouls 'n Ghosts for the masochistic. That should get some hard-core gamers in line.
If Sony doesn't show anything really new with games by e3 2k6, one could chalk up this system for just a piracy-inclined machine. [/off tangent]
On topic, is there really a market for an iTunes for videos? Sounds like more of a counter measure for those who download their favorite shows and music videos via the usual 'dubious' methods...
Can Apple repeat the whole iPod craze with this device?