[FreedomCalls]

Smartflash was a USB-connected secure device that logged you into a unique site for purchasing entertainment content; it preceded (even) the iPod by a couple of years.

That is neither unique, novel, non-trivial, nor non-obvious simply because it is done on the Internet.

secure device = Blockbuster membership card
unique site = Blockbuster store
entertainment content = VHS tapes/DVDs

[Swordmaker]

secure device = Blockbuster membership card

How about any credit card? At that time credit cards carried secure information, connected over the Internet, which interfaced with a Server to contained a database of purchaser data to implement a sale. Amazon used it prior to SmartFlash's invention to process sales. . . even using their one-click processing from a computer. That all fulfills SmarFlash's business model patent claims with prior art. Merely moving the secure elements from a card to a Flash memory device is an obvious move.