Wow, it was entertaining to read this thread :)
As for the neverending car analogies, they miss quite a sizable chunk of business understanding. First off, the PS3 is not, and I repeat NOT equivalent to a Ferrari or Maserati. In fact, there isn't an equivalent to Ferrari or Maserati in the VG market. An average Ferrari starts at around 200 000$, while your average Ford retails for less than ONE TENTH of that price. That's an order of magnitude difference in price, and that really does separate the markets. Wii vs. PS3, then? The PS3 is less than twice the price of the Wii, putting it more in line with, say, Mercedes-Benz. And this comes only from perceiving the prices, I haven't taken into account any other mistakes in the original analogy. If anybody wishes to argue this point further, I'll be happy to follow-up with more facts as to why the analogy fails.
Anyhow, I can't see how one can rationalize that the Wii would be competing in a different market as PS3 or X360, that just borderlines conscious self deceit. The fact is simple: every single video game console is competing in the same market. What is different is the positioning and strategy used to compete in that market.
