According to the scuttlebutt the Argo will be part of the XBox brand and feature, along with all the routine media playback options, a wireless net connection and a social aspect along the lines of the XBox online experience. The real kicker? Microsoft is rumored to so want to convert people from the iPod and iTunes that they will replace, for free, all the music that you bought at the iTunes Music store with Janus DRM'ed Windows Media files.
Microsoft has confirmed none of this, of course, but it seems very likely to me. I won't be trading my iPod in anytime soon, but there are countless XBox 360 users out there that might.