I think it is obvious the two priority issues in the PS3 hardware was the Cell and the memory. Now the Cell is a beast and produced some great things but the cost to develop that technology was high and making games on it was difficult and costly to devs. The Cell helped decide for devs not to be exclusive to PlayStation and resulted in poor multiplats or even exclusives for the 360. Sony could have used a a different CPU and had more time to choose a GPU if they weren't betting so much on the Cell. Maybe even being able to launch earlier, but perhaps blu ray was reason for delay as well, but I think blu ray was a good move as it provides several benefits and its cost went down quickly and made the PS3 the better buy for blu ray movie customers. The Cell was big and hot, making the system large and expensive, and now backwards compatibility is not an option.
The second is the memory set up. There wasn't enough, it wasn't fast enough, and it wasn't unified memory. If they still kept it split, a bump up to 512mb for the graphics would have made the system much better, cell or not.
Before the PS3 everyone was nice to me :(
