The protocol design is very clever. It's as low level as it gets. The hardware device accepts commands like "write this MP3 data into memory" or "stick this byte on the I2C bus". All the hard work is done in the server.
That means functionality can be added without hacking the device. Streaming Internet audio, Ogg Vorbis files? Have the server do the hard work and send MP3 to the device. Menus work by sending IR codes to the server, so you can add new functions. Some nut has added a calculator.
The server may be the barrier to the SLIMP3 becoming common. Anyone into MP3s has a PC in their house and may even have a network. But do they have a stable server machine? It'd suck if mom's relaxing music in the parlour is interrupted because junior is playing SimCity.