The Camelot as shown was only ever intended to be a demo of what can be done.It would not appear in that particular form - the feature set is what needed to be shown, and I think it did (and still does) that rather well.
The Camelot box shown is proprietary, especially the bezel, so could not be used, and the display, although it looks damn fine especially with the visuals on (I am a big sucker for all those), is horrendously expensive as well!
What will come out is very tied to the market it comes out in - for OEM car manufacturers (where the big volumes are) it needs to be increasingly simple-to-use on the move. A lot of the other barriers are disappearing (automotive spec components especially HDDs, customer perceptions etc) but the increasingly legislated need for simple and safe ergonomics is still a big issue.
Aftermarket can afford to add the complex interface, more expensive flashy lights etc. But still, the usability is key - try playing with the Pioneer HDD unit for more than a few minutes without punching it!!
Adding ripping to the Camelot gave it mass-market appeal, negating the need for a PC or time to rip/synch/download etc. A lot of consumers now understand the idea behind it and have woken up to it's usefulness. Keeping all EMPEG-type abilities in means those of us with existing collections don't have to start from scratch, but the product has to be careful it doesn't scare the novice away. A "400-disc HDD autochanger - just stick the CD in and it stores it" will appeal to an awful lot of people (at the right price), but start mentioning compression formats, ethernet, synchronising etc and you are back to the more techy few.
There is definitely a place for this style of product in the market, and I don't believe it is a niche. The technology and the market are ready - just got to get the usability and price compromise spot-on!
Anyway, those are my personal thoughts.
Nick