I obviously respect Molly's opinion--I will admit the Dash is not for everyone--but I wanted to make a case for why the Dash, and its cousins the Chumby and (Best Buy) Insignia Infocast series, are worthwhile Internet-connected devices. Here is why I love the Sony Dash.
The strengths of these devices is in their relative (I must emphasize relative) simplicity. They have alarm clocks, access to Internet radio like Pandora and/or Slacker, ability to play local or streaming audio and video (including Netflix and Hulu Plus on the Dash), and can act as digital photo frames with content from Flickr and Facebook. They can all use the Chumby application store to add additional widgets like stylish clocks, world photo viewers, news feeds, Twitter, Facebook, Google Calendar, and weather apps. They do these tasks well, with (mostly) simple controls, and usually just work as advertised. Nothing more, nothing less.
You could use a smartphone or iPad in a similar way, but then you lose use of the other functions on the device while it is docked. Those devices are also much more expensive. The Dash is a dedicated device, hands off for the most part, just sitting there and doing its job. It's like having a Roku to watch Netflix vs. hooking your laptop to your TV every time you want to watch a movie. The latter will work, but it's a pain and you lose access to your other programs when it's being tethered.
I got my Dash a little after it came out last year and have loved it ever since. Now my 4-year old son loves it too. He's figured out the basic touchscreen controls and knows how to set it to show his favorite clock, the RoboClock, full screen. I got my brother--someone who's not a gadget freak like me--one for Christmas and he loves it. I recently picked up the Insignia Infocast 3.5" for $40 over Christmas and I love that too. I even got myself the Chumby app for Android, and happily play my Chumby Clocks channel on my HTC Evo when it's not in use.
Now to the reality of the business world. The Chumby and Dash are probably not being marketed very well, and their pricing is also not ideal. I've always said these devices should be in the sub-$100 range for them to take off and really be worth the money. The Dash is finally hovering around that price point right now, and the Infocast 3.5" is well under that (I picked one up on sale for $40 during Christmas and now they're back to around $70).
They are devices that no one needs and do not compare to much of anything else available at the moment, but once you get one and learn it's sweet spot of usage (clock, picture viewer, radio, passive widgets), they are quite fun devices.
Finally, others have written about the Dash with similar thoughts, particularly Dave Zatz of Zatz Not Funny. Dave has even covered the upcoming refresh of the Dash platform, something I have been looking forward to. I think Chumby and Sony have created a good platform for a passive Internet device and I am looking forward to updates and improvements that may expand this to a wider audience. We shall see if it works, or if it becomes the 3Com Audrey of the 2010s.