Ken Kutaragi president of sony computer entertainment has stated that the PS3 isnt really a games machine
"The PlayStation  is not a game machine. We've never once called it a game machine," stated Kutaragi at the beginning of his latest interview.
"The PS3 is the product we have been aiming for since the establishment of SCEI," said Kutaragi. "We haven't been creating our [past] PlayStations for the sake of games. Our belief, and the motivation behind running our company, has been to [explore ways of] applying the power of computers to entertainment and enjoyment. We equipped the original PlayStation with a 3D graphics chip, and we equipped the PS2 with the Emotion engine. The PS3 isn't designed to lean towards games. It's not a computer for children. In the sense that our goal has been [to create] a computer that's meant for entertainment, you could say that the original PlayStation and PlayStation 2 had existed as steps towards the PlayStation 3."
"With the original PlayStation, our intentions were to bring SGI-quality graphics into households. With the PS3, our intentions have been to create a machine with supercomputer calculation capabilities for home entertainment. That's why we teamed up with IBM, which is known for its supercomputers, and codeveloped the Cell together with them and Toshiba," said Kutaragi.
So basically Sony have developed a Ultra Powerful Media Centre that supports Blu ray DVDs, this use as a media centre would also explain the 2x HD outputs, 2x gigabit Ethernet ports and the multiple memory card support (a first for sony).