I have had an ipod since they first came out and have had owned every generation.
It would make sense for Steve to release the ipod video. Personally loading up DVDs does not do it for me as a primary motivator for the ipod video. For any of you that have done a slide show through TV on an ipod photo, you immediately see the appeal of being able to watch music videos via an ipod. Personally I would pay for high quality music video through the store.
Currently if you click on an mp3 link on the web it will either load in QT or load directly into iTunes. As the owner of an radioSHARK I can see the appeal of recording live radio audio into iTunes. That's why podcasts are appealing. As small pieces of media to listen to, there is significant appeal in watching small media clips. Think convergence of web and TV as a media delivery device. As a user of the beta of DTV one can see this. Being able to DL visual media into iTunes is very appealing. Think clickable links for all media loading into iTunes.
Being able to show friends my iMovies from my ipod is also appealing. Personally I am sick of lugging my PowerBook round to friends to show off iMovies.
The question is how to make money from this. Once Steve introduces the ipod video even if all you can do initially is watch your imovies and watch free music videos , it will set the market place for when people are prepared to pay a subscription for audio or video podcasts, or movies. I would never use a subscription music service but would pay subscriptions for certain audio or video podcasts.
Let's face it DVDs are going to be downloadable and they can be a reasonable download size now with QT HD. Some DVDs I would want to buy of course, but I would pay a subscription service for DVDs as that it what already happens at the local video store and on pay per view TV.
Once I can stream video via Airport to my TV it all fits into place.
And finally one more thing......
Betcha Steve makes all the current colour screen ipods video capable via an update. Instant screaming fans. Don't forget that OS X has always been intel capable. Why wouldn't he have done the same with the ipods for video?