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Oh so true - Sony has been shooting itself in the foot with it's proprietary music formats since the beginning. If they were smart they'd tell their music and movie divisions to fuck off and concentrate on regaining their spot as the world's top consumer electronics maker.
They also missed the boat with the PS2 - you can get a 40g hard drive in it with an optical-out connection to your receiver, but you can't play mp3's on it. Stupid, stupid, stupid.
The problem is they're letting the much smaller (and MUCH less profitable) media wing call the shots. The result - we won't ever be seeing an iPod-killer from Sony, the company that invented the personal music player.
This guy clearly has a very cool and level head when it comes to evaluating technology - his points are all very good. My pal and I were talking this evening about media rights on the PSP and the Memory Stick horrors we'll have to face to view custom media.
In any case, and whenever it comes out, I'm going to have a PSP for games. To a born-n-raised gamer, everything else is superfluous.