There have been a ton of articles lately in all of the business magazines, newspapers etc that discuss how products that have tons of features and are complicated to use are losing out to simpler products with fewer features but that do a few things well.
There are examples in video games (the Wii), cell phones, portable word processors (the Neo), and many others. I love reading stories like these because it shows that usability beats sexy technology every time (at least as soon as customers figure out which models are the usable ones).
The research studies that look in more detail into this phenomenon find that new customers make their first purchase based on the number of features because they don't know what is usable and what isn't. This is especially true for "early adopters" who care more about bragging rights than use anyway. But the bulk of the customer base cares more about usability because they need to use the core functions on a regular basis. If they were unlucky and purchased an unusable model, they switch on their next purchase. So new customers get suckered, which explains the popularity of the sexy models at first, but the usable ones win out in the end.