Microsoft’s Argo, what is it?

The Seattle Times is blowing the lid of Microsoft’s new portable, positioned to compete not only against the PSP and DS, but also the iPod. This is what happens when you have this many competitors.
Endgaget provided the picture of the supposed device. While the design certainly looks like it could do the media player functions of iPod and PSP very easily, its hard to think of it as a games machine.
But, oh yes, a games machine is coming, whether this is it or not. Millions in R&D are already spent, and J Allard, Microsoft’s Xbox 360 Launch poster boy is leading the charge. We’re hearing its compatible with XNA, and with WiFi standard on the unit, its a good bet Xbox Live Anywhere will play a part as well.
Major movie and music publishers are lining up to offer content to loosen Apple’s grip on the download market.
A big annual meeting is scheduled for July 27th, where the Xboy or xPod or whatever ridiculous name kids want to call it may be revealed and dated for a fall/Winter launch.
Does MS have what it takes? They’re years behind in the portable market, and the portable market is pretty well satisfied right now, even if it does lack a good all-in-one device. And will the buying public be able to stand new DRM standards that may render Apple, Sony, etc downloads incompatible with the new unit?
I don’t know, but it’ll be fun to watch, pass or fail.