Ok, my take on this:
Firstly, NSEW are intuitive directionally, but also a bad idea, both because of the incongruity of the letters themselves, and because, as a result of the ABXY standard for gaming, any alternative choices add a counterintuition as to the buttons' purpose. ABXY presupposes a function for gaming, NSEW presupposes a function for map navigation (just as a device that has play/stop/rewind/fast forward on is presupposed to be mainly for media playback). You don't want people to think of Pandora as a map viewer, or a vcr, but rather, as a device that welcomes gaming (even if that's not it's only use).
Ok, so we've dismissed NSEW on pragmatic concerns. However, there is an argument for arbitrary symbols of some type or another, namely, if we're trying to catch the market who like games, but would mostly use Pandora as a PDA-esque device. Especially the ones who wouldn't own a PSP or a DS because they thinkit would make them look childish. Arbitrary signs would give them plausible deniability of their interest in games if they ever desperately needed it, and make Pandora a more serious PDA-alternative.
However, using arbitrary signs is also somewhat problematic over letters, simply because of how you tell users to press a given button in software for the Pandora. Letters are in any font. So sentences like "Press A to continue" are perfectly sensible. The equivalent for an arbitrary sign outside of a standard font would require either custom fonts (annoying to make), or to display images in a body of text - which is not especially dev friendly when the alternative is entirely trivial. Which brings us back to letters.
Now, so far as which letters are concerned, personally, I'd be tempted to simply use the normal gaming ones, because I'm not too bothered by my gaming device having some obviously-for-gaming controls - i.e. ABXY. Layout-wise, though, I'm of the opinion that alphabetical order should have something to do with it, either reading from left to right or top to bottom diagonally. But I don't really mind which line is which, as long as they are parallel rather then in a cross (a la GP2x).
If you *are* concerned about appearing too obviously for gaming, then WSAD would probably be a viable alternative, or possibly []<>, neither of which have gaming connotations in the same way that ABXY does, though.
So, to summarise:
- Not NSEW for pragmatic concerns of making Pandora intuitively a map reader, and also because of incongruity of the letters involved.
- Not arbitrary signs not present in normal fonts, because of a higher complexity in directing the user to press a given button in software.
- ABXY = good as long as you're ok with identifying Pandora as a device which welcomes gamers. Exact layout is less important.
- WSAD, []<> are viable alternatives if you want Pandora not to appear instantly as a gaming device, and thus broaden the market to those who feel gaming is only for children, but still want a piece of the Pandora action.