Let's see how this game will play out:
1) Amazon will come up with more and more interesting stuff. I expect to be surprised.
2) Someone, probably Yahoo, will buy digg and memeorandum. These sites are hot.
3) In 2004, Google captured everyone's interest with GMail, GMaps, etc. In 2005, the tables turned the other way around: everyone surprised Google engineers with lots of funny rumors (Google PC, Google OS, Google Browser, Google secret datacenters-in-a-box, dark-fiber secret plans, etc). Ignore all that. The truth is that, right now, every other startup is busy imitating Google. The conclusion? Google will have a really hard time coming with something truly innovative in 2006. Probably their biggest 2006 news would be related with buying other companies or closing expensive deals with other partners. I am not blaming Google or anything like this - they will continue to do their excellent work as usual. It's just that these new startups will overshadow their contribution in the future, to the extent that Google will not be able to come in front with almost anything new.
4) Right now, people love to speculate that the fight for the first place will be between XBox 360 and PS3. Well, I don't think so. I personally believe that the real battle will be 360 and... Nintendo Revolution. And, not only that, but 360 might have a hard time beating Revolution.
5) While technologically very good, from the sales point of view I personally think that Sony PS3 will have a very slow start (read: a big flop). Too expensive, games not spectacularly good compared with 360, Blue Ray not in demand, etc.
6) Speaking of which, the BluRay vs. HD-DVD battle won't settle until 2007 (translated = low demand for media in both formats). PS3 will be impacted too.
7) I can imagine that, right now, Yahoo is pretty desperate in fighting with Google on all fronts. So I expect that Yahoo will surpass Google at the end of 2006 in several areas where currently Google is a leader. One of these areas? Search relevance.
8) MySpace.com will enter in a legal trouble or something. They will remain #1 blogging site for teenagers, though.
9) 2006 will be the year when we will see more nice desktops in the mini/micro form factor, in the lines of Apple Mini. These new PCs will be advertised as damn fast (not for a gaming machine, though) and reasonably cheap (around $500).
10) End of 2006 (maybe CES 2007). We will start to see cheap cell phones with incorporated flash-based media players (4-8 GB seems reasonable). However, it is unclear what would be the portal to get songs on these devices.
Disclaimer: This is just my own personal gut feeling, take it with a grain of salt. My opinion here is unrelated with Microsoft's official position. And, BTW, I have absolutely no insider knowledge on any of these - this is why I tried to avoid any predictions on Microsoft products.