I find these rumors highly implausible. While it may have a screen on the controller, I highly doubt it is going to be HD, and probably not very big, either. I mean the 3DS isn't even HD, why waste an HD screen on a controller. Besides, if it were true, that would drive up the cost of the system/controller incredibly. Imagine paying $150-$200 just for a controller, or adding that much on top of whatever the console will already cost initially. And something tells me Nintendo probably won't go with Blu-ray. But if they do, hey, that's a win for Sony.
Also, there is no way to get true 3D on a TV without a special TV and/or glasses. Sure you can create the allusion of depth, however to do this the player will have to stay in constant motion or the effect is lost.
