Honestly, the PSX looks a lot like what Microsoft was trying to achieve with its long-rumored HomeStation project. If Sony rolls out the PVR/console hybrid in North America, I'd expect Microsoft to offer a jazzed up Xbox to compete with the PSX.
What's particularly intriguing about the PSX, at least to me, is the encouragement Sony has given the Linux community with the Playstation 2 console. Sony actually offers a Linux kit for the PS2, and I see no reason for them to lock developers out of the PSX. Microsoft, on the other hand, has done everything in its power to keep hackers from modifying the Xbox console.