It's all in the eye of the beholder. I work at a software retailer and I can say 100% that Sony created the demand for the PS2 by shorting supplies. Can you believe I have people offering me $200 extra PER system to be bumped up on the presell list? That's just pathetic! I'm a proud owner of *many* gaming systems, including all the 16bit, nearly all the 32/64 (a working Jaguar with games is tough to find 😀), and of course, a Dreamcast. I can say without a doubt that I've not been this satisfied with a gaming machine since the old 8bit Nintendo days. The Dreamcast has a great line of games (especially if you like sports!) and the only two hits against it that I can think of right now is the controller layout being not very ergonomical (making fighting games rough to play) and lack of solid, A-list RPGs. The first problem can be fixed with 3rd party controllers, and Grandia II as well as Return to Arcadia are due within months. Hell, I'm *still* happy playing Soul Calibur, a launch title that doesn't even tax the system and still looks better and plays nicer than most of the PC games I play (and without silly patches too!).
I honestly believe that PS2 will be hot till around Feburary when the die hard gamers and parents of children get their hands on one and then Sony will have to drop the price a bit to compete, because while the PS2 plays DVDs, most people don't buy a gaming machine for that function. I myself have zero use for the PS2 to be a DVD player as I have 2 table top players and a DVD drive in my PC. Hence, the PS2 is now just a really expensive machine that (thus far) doesn't show me any reason to purchase it when I'm quite happy with my Dreamcast.
Will the PS2 blow the PC away? Hardly. PC's have alot of advantages the PS2 just doesn't touch. Things such as upgradabilities, multi-media capabilities, varience of input devices, multitudes of graphical options, etc, just make the PC a better choice all around (in my opinion) to be called the "high powered gaming machine".
Course, those are just my opinions, some of them based on first hand experiences, some of them just on what I believe. I will say this, I worked at this same job during the N64's release when Nintendo had all of about 5 games to sell to consumers by Xmas time, and due to the lack of options, nearly EVERYONE bought Mario, Shadows of the Empire, etc. There were no other options. Sony looks to be doing the same right now in that they are shorting the supply, making everyone think they have to have the hottest toy (furby anyone? 😀), only they're doing it with hardware. Sony has stated they will have 1.3 (or something close to that) PS2's available before Dec. 25th rolls around. I don't doubt that figure ONE bit.