If LLU ISPs are (part of) the answer...
If I read him right, Alex seems to think that LLU ISPs are part of the answer. Certainly BTwholesale IPstream pricing, and Ofcom's regulation of it, is part of the problem, but the LLU ISPs have now had a year or three to radically reshape the UK broadband market, and what have they achieved so far? The only one that was visibly different than the rest and succeeding (which rules out Bulldog) was Be Unlimited, who are now not only less visible than they used to be, they're also more limited.
So what's gone wrong there, Alex? Do other countries do things any differently (Hint: some do). Do they do things differently *enough*, different enough for IPtv to be more successful than it will be in the UK?
Maybe the infrastructure for distribution of bits really is a natural monopoly? How sensible can it be to have 4 sets of LLU kit and 4 sets of backhaul to every LLU-profitable exchange in the country? Those extra replicated costs still need to be recovered, from the punter, and in a market which is on a suicidal cost-reduction (and quality-reduction) path afaict there's no way IPtv can succeed.
Downloading in the background for later consumption sounds horribly like the current incarnation of TopUpTV (not identical, but not far off). That augurs well, doesn't it...
As for the folks commenting on UIs: too right it's too complicated, but what's the answer? It's *not* a Windows-based media PC, for various reasons, including the obvious DRM issues already mentioned.