The future of Media Devices

I have come here to ask a humble question of you, the informed, educated public.
Does anyone make a proper media device that will play what I want to play, connect to the internet, plug into my TV/Video/Speaker system and won't require me to hack the hell out of it to make it submit to my will?

I started this quest when I got an internet enabled phone (the BlackJack2) and I realized the potential. It played music, it played video, it went on the net and it was very cool. I liked everything about it but it had a couple of problems.
One: It's a phone and that is basically a device built around a service.
Two: The Video screen is just not very good at working the internet.
Three: It has very limited connectivity. No WiFi, no video out.

So I figured what I needed was one of these new things that used to be called MP3 players but have really become "media" players, like the Zune, or the Ipod or Zen.
But when I started looking at these devices I was VERY disappointed.
The Zune doesn't do internet but has great WiFi and video capabilities and is severely limited by it's software.
The Ipod is Apple and is similarly limited.
Time and time again, as I check out various devices I realize that the makers of the device has clamped it down with it's own proprietary software and has put severe limitations on it.
No where did I find a device that I could install my own software and use in the way I wished.
I thought about a PSP but again, proprietary memory and software and severe limitations.

Then it occurs to me... What about this new thing "Android"?
Surely that's a device that is exactly what I'm looking for.
Unfortunately it turns out that there is only ONE device using this software and it's a phone.

So I ask you this, for debate...

Do we need a device, like the Sony Mylo that is WiFi, internet enabled, open software and will play what we want, when we want and can be upgraded like we upgrade our PC's for functionality?
Who is going to make this device?
Is this a pipe dream?