Replace the PC? Well thats being Sonys idea ever since. Do you guys remember the PSX? You can run multiple applications on a PC word processing, spreadsheets, manage your personal finances, you name it BUT most of the people are only using the computer to connect to the internet, download pictures/videos from their digital cameras/camcorders and play games. I think this is the target for the PS3. The same market the media centers are targeting.
Think about this: five of ten year ago if you wanted full entertainment at home you needed you own TV (of course), VCR, and several components for your audio system (cd player, amps, etc).
Today you only need a media center and youre done. All those extra components, that Sony used to manufacture, are redundant now. This is the new trend so if Sony wants to survive they need to provide the hardware people want. The Sony CD player deck has been replaced by a Dell pc running Microsoft software. Not the picture Sony likes.