Well, Sony Computer Entertainment aren't hosting a keynote this year at the Game Developers Conference, but they did have a conference for developers on the tools for Home.
One of the tools is the ability for developers to create their own clothing, furniture, and even avatar heads (such as a head that displays Ratchet from Ratchet & Clank or Sweet Tooth from Twisted Metal). The custom avatar heads will not be customizable by the user however for obvious reasons.
There are features that include scene tools for making private and public spaces and how to create menu systems for Home users to go from Home into online multiplayer games.
Game developers will also be able to create interactive items for Home. They showed off a "Bubble Machine" where 20-30 Home users danced around the machine. Developers can also create items like a virtual camera, TV remotes, and footballs, either to be sold or gave away with the game. The items can be interacted with as well, meaning it can have animations, collision, and audio.
Yeah, as we suspected, no in-game XMB was announced at this conference since it's merely a Home conference. Hey, there is always tomorrow (no seriously, there always is, there is still one more day left).
[GDC: PlayStation Home Tools and Details]
Update 5:10 PM PlayStation Universe have posted a video showing how users will use the in-game PSP to launch multiplayer games. Enjoy!