You may have a point there, I actually have a Windows Media Edition PC that came with 1.5 GB out of the box and I do run Photoshop on it. However, I have two screens attached to it, so I usually don't run apps on my wide screen TV.
But I actually think I will do this more, once I get a bigger screen which lets me browse the Internet with big enough characters that will be readable from my TV chair.
Anyway I think it is very conveniant to have all pictures located at the machine connected to my TV, it is very responsive when flipping through my pictures, and not having to duplicate them to two PCs is also conveniant. I prefer making backups in a different way.
Yes they would target a very specific PC area with such a product, but in the long run it might be expanded. Kutaragi has told us the PS3 is a PC, so it would not really come as a surprise.
Whatever this AV-PS3 turns out like it will probably share the firmware of the PS3 to a great extent, so it may not be that incredibly expensive to make, virtualisation is not that hard these days. The product you describe does indeed sound compelling.
I think the ability of PS3 linux to log into another PC - a session on a remote Windows PC using RDP if nobody is logged onto it, or an independent session on a remote Linux PC even while someone else is running a session on it, is also quite compelling - whether with the AV or standard version of the PS3. With Linux, 512MB RAM and a 120GB hard drive, the PS3 becomes a serious standalone desktop computer for pretty well any use.
