I keep hearing people say they are building a single device for multi-computer homes and new users, as though these customers want the same things. Rely on dial-up modems. It's really funny to hear Sony talk about eVilla as an entertainment device that connects to the world at 56 kbps. But the real market is in broadband-enabled homes and offices. Rely on Ethernet connections.
Simple connections are the key.
Subsidize your hardware costs with service revenues. My UltimateTV stretches the definition of Internet appliance, but is another example of an Internet-enabled tool for the home. Keep after it. I want to be careful not to be too damning of the players in this market. They are all doing the best they can to pioneer something that really isn't ready to be successfully explored.