They are not abandoning motion control though, it seems they are making it less a gimmick. 

Wii Sports carried the Wii to about 25 million Sales. Is Cafe gonna have the "killer" launch title that "everyone" wants to play. I remember when I got my Wii early on in this gen (before I got my PS3, which now takes more than 95% of my gaming time) that all my friends, cousins, grandparents, relatives, were ALL amazed at Wii Sports. Word of mouth for the Wii started off quick because of it.

Good then.

Yeah I saw that. Actually I think I called their having a touch screen and an application store quite a while ago I think! Anyway I kind of think they may just stick with the touch screen controller pack-in for simplicities sake and to make it clear what the purpose of the system is, they'll just have full backwards compatibility with the Wii and like I wrote I think they'll use branding to make it clear which game uses which controllers.

Are we still waiting on the Wiimote with motion plus to release as one whole complete unit rather than as two separate parts?

I just checked beginning 2 year sales for all three consoles:

Wii: 45 mil
X360: 21 mil
PS3: 23 mil

If Nintendo manages to land somewhere in the middle, maybe 30 mil the other two would be a bit concerned IMO.  That's a huge headstart and could prove too enticing for 3rd party devs to pass up.

But what about using new Windows Phone devices as touchscreen interfaces for the K360?  We've already seen it previewed at MWC 2011.

While maybe not as integrated as the touchscreen will be in Nintendo's new console, it's still could be something used to 1) promote WP sales to K360 owners and vice versa and 2) emulate some of the experiences that would differentiate Project Cafe experiences.

Theoretically, Sony could do the something similar with the NGP.

Love the editorial though, Squil.  Interesting read.

Yeah in raw power a desktop will still crush it but as far as games and development go, there is nothing out there or in the pipeline that it can't handle. Crysis in 3D maybe.

Half Life 3 to coincide with Steamworks on N6?

By placing the Wiimote on the backburner they effectively seal their interface as the dominant mote style interface by a huge margin. It poisons the well so to speak because it turns what was once a growing market into a stagnant or shrinking market simply because at the time of this announcement they control 90% of it but have changed focus away from the pointer/motion controls. Then as it would be impractical to support three interfaces at once, what does Sony do? Do they copy the touchpad and abandon their famous dual shock pad design? Do they abandon Move and leave all those people who supported them with no choice but to suck it up or buy an NES 6?

Im not sure really... it definately is possible although Microsoft is certainly helping Valve set favourable terms given the fact that they are about to launch a global application store in Windows 8.

First of all, the touchpad has not been confirmed, unless there is a direct quote from Nintendo I missed.

Second of all, even if they are doing that, it's not going to work. Sony will fail by their own hand, not Nintendo playing switcharoo with controllers.

Nintendo wants to at least beat Sony and Microsoft, they need to keep up the mainstream games, not games where they like to show off. The former is where the Wii rose, and the latter is where the Wii faltered.