I just saw that there is already a linux-based offering in the PMC space. A company called ARCHOS is releasing the Pocket Media Assistant PMA400 this month (product specification page here). The feature list is very impressive, and it even claims to be capable of dealing with DRM-locked Windows Media files. And for under $800, it's quite an interesting device... especially considering it supports PDA functionality (touch screen!), wifi, wired ethernet, and even can record direct from cable/satellite.

This kind of competition is great, it will help push the envelope in the portable media and media center arenas.