I think even then that folks like Roku Labs and Slim Devices will still have a market after portable players evolve into more home-theater-centric devices (digital output to avoid mediocre DACs, video output for navigation), and old_school's setup touches on one reason why. First, a stack of hard drives will allow you to forego compression and preserve your material in its original form - until you can get a 1TB iPod, that won't be possible with a portable. In addition to that, you have some other benefits. A NAS or server can be accessed from anywhere in the house (assuming you have a network connection there), so multiple units can share that pool of data. Plus those systems will allow you to store more than just audio, although we're just starting to see that ability used. The Kaleidescape DVD server offers a tempting hint, as does the Roku Photobridge HD (which will play back HD-quality video across the network, allowing you to set up a computer as SD/HD DVR and access it from multiple locations in the house).

I haven't made the move to a setup like this yet, but I've mulled it over a few times and may still go through with it in the next couple years.