Ok, I stand corrected. It looks like this will be an actual product.
Considering how much Sony likes to gouge their customers (memory cards, HD add-ons, multi-tap, ad infinitum), and the fact that this thing will have just about everything built right in... I expect it'll run somewhere in the range of £2500.
But this is a huge announcement, as it points to Sony shifting away from the games and more towards home entertainment. MS has already said that they are planning to do the same thing, but I don't expect them to re-release the XBox with their home station. It'll most likely be an upgraded games console with all the bells and whistles. This would seriously widen the gap between the pushing power of the PS and the XBox.
And they couldn't very well release the PS3 a year later, after all the sheep have spent dad's money to buy Sony's new all-in-1 machine, without splitting their market in two. (sorry, couldn't resist

)
This could be a very cool piece of kit, but I'll all come down to how everything works together. (which we won't really know until it is much closer to release) Also, as a TiVo owner, it'll be interesting to know how much of a monthly fee you'll have to pay for the PVR functionality, and if it'll offer a lifetime subscription offer in place of it.