PS3 is a great deal, but not for the masses
I agree with you that the PS3, with it's ability to do play games, play BD movies and serve as an internet connection is a remarkable piece of equipment. To me it is the best BD player on the market.
I do disagree with you on one point. If you show the average American consumer both a $300 HD-DVD player and a $400 PS3, his response will be "both are too expensive". I plan to buy a BD player when 2.0 profile players are available, but since I am not a gamer, will probably not buy a PS3. Yes it is nice that it plays games (would be better if backwardly compatible), but my interest is in playing movies.
The American public will start to get involved in a bigger way when prices drop for BOTH the players and movies. The $99 sale that Walmart did put a lot of players into average people's hands and was cheap enough to be purchased as a good upconverting player with high def capabilities for if / when a high def television was purchased.
Both $300 and $400 are too expensive for anyone but an enthusiast. The second thing that needs to change is movie prices. When a new SD-DVD is selling for $16 at BB the week it is introduced while the same movie is $24 for BD / HD-DVD then the consumer will pick the SD-DVD unless it is something they really want in high def.
I am optimistic that we will get there. High def movies will become the norm over time (I think DVD total sales only passed total VHS sales this year), but not as quickly as many in this forum are wanting. Also, I think both formats will survive, similar to the DVD+ / - R recordable formats.