The main reason why the Panasonic Q didn't flourish was due to the fact that firstly it was more expensive that both the original Cube and the PS2 (which also had an in-built dvd player) and although Western Ninty (and quite a few non Nintendo) fans went totally "ga ga" for the product, Nintendo saw no need to release it over here in the West. (Cos the Cube was selling exponentially well...or not)
Whether a a "WiiDVD" console sells well or not depends on a few factors. When the Q launched about for years ago or so...DVD devices were still quite expensive. To manufacture the equivalent now could cost as much as 50% less (Which is why some people still argue against Nintendo's decision not to include DVD playback with Wii in the first place) hence more people will be inclined to buy this than they would have with the Q.
However as many (and Nintendo themselves) have stated, DVD players is a saturated market and it's quite hard these days to find any one that doesn't own at least one in some shape or form so there's also the tendancy for the "WiiDVD" console to be ignored. Maybe ifthey decide to stop excluding the Western (gaming) world from these enhanced gadgets there's there a possibilty that it'll generate more sales.
Ultimately they could decide optimise it for HD dvd playback and add a Dolby digital encoder and optical or coaxial output(although it won't make that much of a difference to the games as they are all going to be encoded with Pro-logic II as standard) and if priced correctly, could put a new light on things because for the momentas it stands, the success or failure of a WiiDVD console seems to be a mixed bag.

( Edited on 31.10.2006 14:46 by OLU1701 )