The picture you have above is a fake. The actual device is real, but the software is not.
It's very unlikely Sirius would give up their technology to a portable mp3 player other than the iPod. About a year ago, Sirius's president or CEO (don't remember which one) made a statement that they were in the works of introducing a proposal to Apple to put Sirius on the iPod hardware. Steve Jobs shot it down.
That does provide fuel for Sirius to go to Microsoft, but that device is definitely not an iPod killer. Remember, there've been 10,000 iPod killers released in the last 3 years.
I believe having Sirius radio on a small handheld like that would demolish battery life. I know the wifi is going to be a heavy power consumer if it's 802.11. It won't be Bluetooth b/c who wants to transfer data at 115.2. IMHO, the wifi is just a gimmick to get the attention of consumers. This is presumptive, but a turd with an antenna out of it is still a turd.
The project is called Argo (sorry if someone already mentioned that).