I just don't see wi-fi being a big hit with these devices... until Apple provides it with fantastic iTunes integration... and even then, most people won't use it unless it's idiot proof. Many people that have the iPod don't even have wi-fi...
The player in question isn't a recognized brand name, so it's not going to overtake iTunes anytime soon. For $299, it looks like you get a cool player, but wouldn't you rather get a iPod video for that much?