It is really a shame that Apple chose this location. Computerware is one of the few Mac-only computer stores in the country and placing an Apple retail outlet this close is bound to steal business from them. There are many, many places in the country or the Bay Area where there are no Mac-only retail stores. I think you're wrong. This is going to be a great, though expensive demand generation program, but even if Apple can make just enough to cover expenses on these limited NikeTown like stores they will have served their purpose.
Dealers can calm down unless they fear competition at full retail.
The service is sooooo bad at Computerware I wouldn't feel too bad if they went out of business. Well, I would feel a little bad. They should really try to shape up their act. A year ago, I had to wait in line for half an hour to buy a SCSI terminator at the San Rafael store. Stomp USA's Apple displays are always trashed.