Sounds cool...but...
Speaking for the Pro-PDA crowd, this rumored device sounds interesting, BUT...if this is all it does, I will be mildly dissapointed, and probably won't be spending any money on such a product.
The iPod makes sense because, even though it was expensive, I am a music fanatic, and this fundamentally changed the way I listen to music. I use my iPod everyday. It is now vital piece of technology in my life.
I already own a Tivo, and that too, was a life-changing piece of tech. It's great; if you don't have one yet, get it, and you won't look back. The only thing left, for me, related to the Tivo is the ability to burn a DVD to back up or save programs. I expect this will happen in the next couple of years, combinbing a DVD-R drive into the Tivo unit. That will solve that...
Do I want portable video? I think it would be nice as an added feature to a feature-rich PDA. How often would I use it? At most, perhaps 1-2 month. I'd not use it to watch feature length movies...I can see saving my iMovies and pictures of my kids, small presentations, etc. But, I wouldn't spend much money on a device that didn't do much more than this. As a secondary feature to a much more useful item, such as included on a PDA, that would be great! And, I'd spend $600-$900 on a great Apple-branded Ultra Computing device. But, I'd expect such a device to completely replace my iPod, and any VidPod.
But, the fundamental question is how much more I would spend on essentially a video-enabled iPod? Given that the use of images and video would be a relatively rare use for such a device compared to how often I use the MP3 player, I'd not spend more than $100 more for a video-enabled iPod.
I fear the wow factor will be cool for such a device tomorrow, but that sales will be dissapointing.
APPLE...WE NEED AN ULTRA-PORTABLE COMPUTING DEVICE. THOSE OF US COMMITTED TO YOUR PLATFORM ARE LACKING THIS KEY PIECE OF DIGITAL LIFESTYLE TECHNOLOGY!!!