Just saw this topic thanks to that link... super interesting.  I would definitely like to contribute if I could?  However, I can't quite imagine how I would do this until I am more familiar with this... mysterious device.  Any way I could get some words from you on the controls you have in mind and how software interfaces (hopefully just as a gamepad)?
 
 
If this thing, and the diy arcade that I am trying to conceptually birth happen at the same time, this would be great installation at the (currently imaginary) exhibit.  Also could help getting some new users to this place if that is what everyone around here is still looking for.

I have ordered some nice coloured materials to print the casing for this. I am not going to show what the device is going to look like just yet as I don't want to spoil the surprise really. I think I will have an unveiling evening in the same vein as the Sony and Microsoft events from earlier this year. If you'd like to make a release game for the grand unveiling then get in touch with me and I will PM you the details.

I have some questions though:
<ol><li>Do you think that the gameboy was the perfect handheld console? I was considering this in the respect that handheld devices with an "analogue" stick seem kind of forced and I wondered if I should keep binary buttons and engineer my games such that there is no use for analogue input. The other solution is that I add two clickable analogue sticks to the device.</li>
   <li>Would you prefer a new console to be ergonomic and playable or interestingly shaped with obscure input methods?</li>
   <li>Is external media important for the image of such a device? - i.e. if you were an indie developer would you want to have your game put on the sticker or a pseudo-catridge (most likely a 1GB SD card in a 3D printed shell).</li>
</ol>

1.  I am with you in supporting binary d-pads over analogue d-pads.  my thumbs always get lost in analog d pads.  For example, without looking at the controller, it is EXTREMELY difficult for me to know where "down" is directly since there is no reference point that I can feel for "down" on the analog d-pad.  This goes for all of the other directions too.  Another example to illustrate my point - if I am in a situation where I need to move a character or an object under the influence of gravity (mario for obvious example) to (for example) the right, while trying to do so I am never sure if the stick is at the right most position or not and therefore never sure if the character or object is moving as fast as possible. Maybe it wouldn't be so rough if the top of the stick had little notches denoting the directions on it? Or if the plastic barrier had notches carved into it (wii might have this?), but this effect might ruin the whole point of an analog stick. I'm not sure, but I'm sure there are some other solutions  i'm not thinking of.
 
2.  I think this largely depends on what type of games the console plans to release.  Personally, I didn't find any enjoyment in having to shake the wii mote to make llink do who cares, know what I mean?  It isn't like it felt more real.  If anything it felt more fake to be honest.  Just like books can seem more real than movies, I think efforts to increase realness on the level of "novelty"  only force your mind to imagine the shitty "novel realness" instead of your mind imagining the feeling of the more realistic and satisfying realness portrayed on the screen.  I don't want to think about shaking a wii mote in order to swing a sword over my head, cause the damn wii mote weighs nothing and does not make me feel like I am doing something incredible, and only reminds me that i am a pathetic loser in a basement in long underwear.  However, watching someone swing a sword while not being pulled back into the "real space" of my shitty basement keeps my brain in epic adventure mode..  see what I mean.
 
But to play devil's advocate, bop it rules.  so much.  So unfortunately, it really matters on the game.  I think the less intrusive and more ignorable the controls are, the more appropriate they are for supporting many many games, where weird, interesting, and obscure input methods are more appropriate for controls that are custom tailored to an (lets say...) arcade type machine.  (hint hint).
 
3.  This is a good question.  Obviously "purchasable" or "swappable" media is important if you have a console that has many different games, but isn't really necessary with the ability to just download or update things.  Two different roads to take, that is all.  Downloading games is probably financially cheaper if the console is going to be mass produced or if there are going to be a ton of games, but creating external games will probably save you from using boat loads of time and energy dealing with creating a system to host, download and install the downloadable content.