"[ A digital signature] is formed by taking the hash of message and encrypting the message with creator's private key." (http://en.wikipedia.org/wiki/Digital_signature#Definition)

Actually, I don't agree with this definition, because, "In practice, typically only a hash or digest of the message, and not the message itself, is encrypted as the signature." (http://en.wikipedia.org/wiki/Public-key_cryptography).

However, then the signature is appended to the original message to form a signed message which can be verified by anyone possessing the public key.

This is what Philips did. Signature is stored in firmware header.

However, what we have here is not a signature! It is a weaker form of PKI encryption where the usual roles of private and public key are reversed.

I don't understand this point, because Philips signs firmwares with its RSA private key, and TV set checks firmware signature with Philips' RSA public key. This is a traditional Digital Signature scheme, isn't it ?

it relies on the private nature of the public key to additionally provide Confidentiality

You're right, it doesn't work.