We'll all know more come E3. Some have suggested it's 'significantly' more powerful than the PS3 while others say only a notch above the 360.
Regardless, I still think it's either too soon or too late for a console. But I think a lot of people expected the Wii to lose momentum before the PS3/360. And while it's easy to draw parallels to the Dreamcast, I don't think it's going to be a flop of quite that magnitude (as the Dreamcast was hindered by unrestricted mass piracy).
I think the screen could be cool for UI elements (swapping equipment, inventory management, Four Swords/
Pac-Man Vs. type gameplay. But who wants to spend more for controllers when a full Wiimote/Nunchuck was $50 for ages?