I wish it were the beginning of the end for the Wii. The 360 is actually a good system, but the PS3 will slowly strangle it from here on out. I have no idea how Sony can counter the Wii, but as long as 3rd party games keep selling like crap on the Wii, they should be more tempted to go to the HD systems. And thats a win win for me and real gamers everywhere. :)
Sony doesn't really have to do much to counter Nintendo.
By building a non HD console and defining it as a family machine Nintendo is effectively forcing the gamers that like more than Nintendo first party games to buy a second console ( the Wii is getting less multiplatforms games than the N64 actually was getting last gen...)....
And no you will never get a GTA4 Wii port, because even if it was feasibly doable it really would not fit well with the family image Nintendo is trying to give :P ( watch grandma, I'm gonna get a lap dance and kill a couple of cops !).
Agreed, Nintendo is really the best fit to introduce people to gaming. Their games are easy to get into and family friendly for new gamers. Nintendo has a cute and simple image (Mario, Zelda, other cartoon like games, etc), Sony has more of a general entertainment image (movies & music, top realistic movie-like games). However today's kids will grow up during the PS3's lifecycle and new people including many females will get more comfortable with gaming (I don't expect much from grandmas and grandpas, but I think they aren't really Sony's target to begin with), possible eventually wanting to get more from their gaming experience.
A far more diverse games library including visually and audio wise far more impressive and complex horror, thriller, hardcore and mature orientated games in addition to family friendly games like Ratchet & Clank, Buzz, Jak & Daxter, LittleBigPlanet, Singstar, etc and useful family features like Blu-Ray playback or PlayTV.
The Wii and PS3 are different enough to expect many gamers to eventually own both consoles. A cheaper slimline PS3, Playstation Home and higher HDTV penetration (also bigger Blu-Ray library) will IMO make the PS3 a very compelling product for many 'casual gamers' to own as well.