Nintendo is in the unique possition of not having an agenda with with music, movies and other non-gaming functions. I think they've finally realized that. In the past they wouldn't even think of doing what they're doing now. Now they're allowing GBA video, hell they're even making a GBA MP3/MPEG player themselves...that play SD cards (instead of some goofy format that they themselves created), they even allowed WiFi in NDS, they're also allowing the Revolution to be hooked up to a PC monitor (not that that's such a big deal, but the old Nintendo wouldn't have done it), there's even talk of dictionary, PDA & translator functions with the NDS. Without having an agenda in the Blu-Ray vs HD-DVD "war" they also find themselves in a possibly advantaged possition. I think Nintendo will also allow at least DVD playback and embrace online (wireless) gaming with not only portables...but with Revolution as well.
When's the last time they've actually come out and said "covergence is bad"? Not that they've changed their philosophies...just that I think they realize that there's nothing to lose by offering non-gaming functions here and there. Will Revolution do V-O-D, be a TiVo and be a TV-PC? Certainly not, but maybe Nintendo will lean back on their console routes (Famicom Family COMPUTER/NES Nintendo ENTERTAINMENT SYSTEM).