PalmOne's LifeDrive is a PDA that has a 4GB hard drive.
Honestly, I'm tired of every new product that comes out being the "iPod killer." The iPod is the mousetrap for music, and doesn't need to be killed. I would, however, be in favor of even more convergence. My Blackberry 7230 comes extremely close... but having a hard drive in it and being able to play MP3's and AAC's (and videos, and Tivo recordings, etc.) would be even nicer.