There are already rumors that Sega is planning to release an upgraded Dreamcast around March 2000 which is to be called "Dreamcast 2". This new system is purported to include enhanced graphics capabilities and a DVD drive, along with the redesigned SH-4 and 32 Megs of RAM. Apparently there will also be an upgrade kit for existing Dreamcast owners.

Don't believe it. Sure, Sega mentioned the Dreamcast being upgradable... but that would be terribly quick. And when you think about it, DC's second or third generation software should be able to easily compete with PSX2's first generation. Don't expect a major upgrade until the Dreamcast reaches its maximum output.