I think that when many people talk about (software) prototypes, they mean the beta (or even alpha) version of the first version of the software.
I don't think what anyone is suggesting is creating a prototype and then completely throwing it in the bin and creating the retail version of the same program from scratch.
What Nathan is suggesting (and I agree), is to get a version produced. This doesnt have to be the uber polished retail candidate. Just a version which works and is able to show any investors or future partners/developers/testers what the program will actually do.
GordyR could
1. get this alpha (or prototype) version produced (on the cheap) and then see if there is any interested. He could follow this route; or
2. spend a lot of money on getting a full blown, polished, retail candidate, spend a lots of money on it and then have the program (possibly) fail.
Option1 would cost less to get it off the ground and it would allow him to test the water. Option2 would cost a heck of a lot more and if it fails, a lot money would've been wasted.
If he chooses option1 and the feedback is positive, he could then get investors on board (if he wants to); he can show any potential stakeholders that his program has a good chance of succeeding and can then have the full blown/expensive/polished retail candidate produced.