The only reason Dreamcast game selection is low is because most places are keeping room for the PS2. Honestly I don't see it being the next best thing because you won't be able to copy games for it for quite a while. While most companies are developing games, most likely they'll develop them to fit onto a cd and just add music to make it over a gig and fit onto the DVD disc (which I might add will most likely be a hacked version of the DVD standard so the average Joe with a DVD burner (not a DVD writer since those don't even write to standards yet) won't be able to copy them.
Before anyone gets in a huff about the evils of pirating games and whatnot, come to the realization that the ability to pirate games for PSX is what made the system to big in the first place. Sega's Saturn (I believe... it's been a while and noone has heard jack about that system...) was and still IS better then PSX at rendering and final results. It took a little bit more effort to program, but the end results were fabulous. And BTW, Sega had anaolg controllers out for their system before Sony did, even though Sony DID encorporate that into their consoles from the beginning.
Now if you want to see which system will overcome which, just sit back and watch as Sony drowns the world in advertising, pushing their system to the limit.
And just to jab at Nintendo here, the reason they never made it big was because they skipped a generation between SNES and N64, gave time for PSX to take over the market and then came out with a console that you had to load cartridges (that couldn't be copied easily, mind you) into the system still. Sorry, I like fitting 100+ games into a CD binder. *shrug* and they were gone.
PS. Sorry about the long post... big corporations get me in a huff occasionally, but when it is personal it just gets worse.