My understanding is that the chip won't take a firmware upgrade... not that it would "fry" it. They did not mention which one but I almost want to think they used the same chips in their infinitvs as many have posted about having to return the infinitv when it also no longer will take an update... Though it may be entirely different. I don't have the specs of the echo for ram, and flash or any hardware that can also be upgraded ... it could be that the flash memory chip is fine for up to half the contents being filled but go beyond that you get errors... it could also be something that controls the flashing process is failing... I do wish they would be more specific but I have a feeling that they don't want to open up potential claims for hardware defects when it isn't a defect for the purpose of the device's release. But the reason they gave sounds fishy as there would have been other methods to fix the problem if it was really just a problem in upgrading the unit. For all I know the assembly plant substituted inferior components that "worked" but were not up to the task of doing any more (such as substituting a 2MB chip for a 4MB chip or something similar)
I honestly feel that after all was said and done, that too many people complained about 3rd party apps needing a mouse and keyboard, that they decided that to fully support android they needed both more flash space as well as more ram in the unit and perhaps internally also tested it on a quad core model and said we really underestimated what we needed to make this work... do we announce the echo 2 now or let a few months pass to announce the new hardware... quadcore, double whatever ram/flash memory is inside, built in bluetooth (for wireless keyboard/mouse/deluxe remote... might add wireless to use as an "android" device but say it is unsupported, in terms of quality for WMC), and perhaps add a few more usb ports to add a keyboard/mouse/drive/tuner without the use of the hub (I'm almost talking about a stripped down "Q" appliance that "could" do it all...but the price also goes up $50-$100 without the optional extras (Utilite has a similar "pro" device for $219 with 32GB sata ssd and dual gigabit ethernet and dual graphics)
I had also read that there was a problem with the processor fully supporting the timings needed for HDMI without adding a frame every 16 or so seconds... last I heard they might fix this with later chip releases.