I never actually used a Dreamcast, but I remember being impressed by the controllers. It's an awesome idea which hopefully Nintendo will really pull off well.
The controllers of the Dreamcast are nice but after playing for more than an hour with it your hand will be quite cramped. I think Microsoft have perfectioned the DC controllers for their xbox, though they indeed should've put an LCD on it.
I wonder if any of these manufacturers have played with the thought of putting a sensitive touchpad or trackball on a joypad.
Btw. the Dreamcast is awesome for split-screen multiplayer games.