I don't think the popularity of the Dreamcast had much to do with online featues. The Dreamcast was the first system that could match and beat arcade machines in terms of graphics and performance. I think the Dreamcast's hardware was also easy for acade machines to convert to, so the best version of every arcade game released at the time was on Dreamcast and made it a last hurrah for that era. A lot of Dreamcast games also were either never ported to other consoles or the ports were inferior (the PS2 version of Grandia 2 comes to mind), so there's that sense of exclusivity as well.  

I don't think it's popularity was due to the online features either, the console market really wasn't ready to support, but I do in discussion with others about the system tend to get that in this entire "well, it was ahead of it's time" argument about why the Dreamcast was so great while it pratically did very little for the system in the grand scheme of giving a shot at life. And again, I'm acknowledging its power and game catalogue. But back to the Betamax comparison, where did that land it? I'm fine with the popularity, it deserves love. I give it love. But I'm wary of ascribing such a superlative, iconic legacy as many paint for it when it's as arguably one of the long line of powerful systems that became relative quick relics outside of Japan in terms of console lifespan.

I agree with you that the legacy of the Dreamcast may be seen through rose-tinted glasses, especially since the PS2, XBox, and Gamecube were so much more powerful than the DC that it would inevitably drop out of the console war. The Dreamcast controller was also one of the worst first-party controllers ever made and grossly ill-equipped to handle what games would become. Still, I don't think it's bad for people to be nostalgic about the system. 

I'm not usually a graphics whore, but I will say a big part of the appeal of the Dreamcast was its visual superiority over N64, PS1, and most PS2 games of the time.  I owned both Madden 2000 for the N64 and NFL2K for the Dreamcast, and it wasn't even a competition; NFL2K was superior in every single way.  The same could be said of Rayman 2 and THPS2.  Games simply looked better and played more smoothly on the Dreamcast.

That said, I still don't think it had even close to the library of quality of games that the N64 had, or that the PS2/GameCube/Xbox would go on to have.  The original software just wasn't quite there.    And, yes, for where the console may have been ahead of its time, the controller was not, being over-sized and lacking shoulder buttons and a second joystick; like Chris said, the future would not have been kind to that controller.  

Good console, but not great, and perhaps a bit overrated.

The Dreamcast is fine, and all. But a Sega system that seems to be lacking love is the Saturn. I love the hell out of my Saturn.

I'm one of those that considers the Dreamcast the best console ever. For me personally, it was the level of enjoyment I got out of it in the short period of time it was on the North American market. Power Stone 1 and 2, Tech Romancer, Jet Grind Radio, Soul Calibur, Sonic Adventure (at the time), NFL2K, Marvel vs Capcom 1 and 2, Street Fighter III Third Strike, Virtua Fighter 3tb.. and the list goes on and on.

There isn't any other console that has provided me with what I consider to be a string of high quality titles within it's first year of life. Imagine what we would have seen if the console had lasted the usual minimum 5 year life cycle worldwide.

During the first year (and in some cases, 2 years) of the life of any other console in history, I don't look at its library as being as complete as the Dreamcast's was. You mentioned a few games that some people would add to a top 10 list as games that you didn't really care for all that much, which leads me to believe you just weren't a fan of the kinds of games the Dreamcast did best.

I wonder what people would have thought about the console if it had 3rd party support on the same level as the Playstation. I think the biggest problem with the Dreamcast is that only fans of certain types of gameplay will consider it their favorite console. For example, my second favorite console is the Japanese Saturn, because it basically was a 32 bit Dreamcast.

Im full of bias since Sega and Capcom are my 2 favorite publishers, but I've had this discussion numerous times with people. Everyone that agrees with me about the Dreamcast's greatness usually say there was just something special about the way games were made for the console. It basically was an arcade machine, and in many ways I feel like everything that came out for it was made in an arcade style. Take PSO for example, an online RPG. The way the game was presented was as if it were an RPG made to appeal to somebody that heavily enjoyed arcade styled gameplay, and it seems that if arcade style games aren't a top attraction for you, the Dreamcast would have been lost on you entirely. The impact that many of the games made on me as a gamer is something that still follows me today.

Also, in response to the comparisons to the PS2, Gamecube, and Xbox.. i disagree about the graphics being a big blow to the consoles life span. The NES, PS1, PS2, and Wii have all been the weakest consoles in their generations, yet they were the leaders by a remarkably high percentage. Also, i dont consider the PS2 to have had that much of an advantage over the Dreamcast, I actually didn't like the graphics for the PS2.