I also fail to understand why everyone assumes the controller will cost >= £100, or $150 and the console will cost £300 or $450.
First of all, I don't think that even with the "SDK V1.3" crazy specs the console would be that expensive, as it's been rumoured to use some out-of-the-box components in order to cut costs.
The Wiimotes also used pretty straightforward technology for their time (infra-red camera, accelerometers, bluetooth, internal memory, speaker, etc) and they never passed the $50 dollar mark.
Sure, the new controllers will probably be more expensive, but looking at a possible BOM, I don't know how adding an LCD touchscreen and a puny camera sensor will cost another $100. My bet would be on <$100 for each extra touchsreen controller, with most games having the capability of being playable with a Wiimote for split-screen multiplayer.
I for one am really hyped with the remote play function. For many times, I play in my PSP while at home because I just feel like lying in my bed (or simply not leaving it during weekends), even though I have a high-end gaming PC in my bedroom.
Heck, I'd pay quite a bit for an efficient and fail-proof way to stream games from my gaming PC to my UMPC, even if it was limited to Wireless N networks. Streammygame is just too buggish and hard to use.
Nintendo Stream (or just "Nintendo Nintendo", according to latest rumours?) would solve all that for me.
Then you like it and want to play this new 7 player Settlers of Catan game, and price the cost to play at another $500 for 5 controllers...
Whereas if your existing mobile or iPod could provide that personal interface, the cost is just the game. I don't know what phone networking options exist though. Perhaps what I'm thinking of just isn't possible at the moment?
First and foremost, I don't think Nintendo will upgrade the 4-player-per-console limit.
As for having to buy all the additional controllers, I find that a bit exaggerating. I have a Wii, I've had lots of game sessions at my home with 4 players and I've never had to buy 4 Wiimotes.
There are so many people with Wiis that all I have to do is ask them to bring their own controllers. That was the point of keeping player information in the controller from the beginning.
I also believe connecting handhelds with puny touchscreens would become more of a hindrance than an advantage for many games.
There's a valid reason why the screen is 6" and not 3.5".