I don't see it as cost effective. Just buy an xbox or ps3 and be done with it. They can do nearly everything you want for a fraction of the cost and you can play video games if you like that sort of thing.
I'd have to agree with others, if htpc is your thing, once can be built rather cheaply now-a-days
350 is about a bare-bones system, which still allows playback of 1080p/dts content and 10ft interface
But $500 is a bit more realistic including the tv tuner....
I'm not huge fan using ps3/xbox360 as media clients as both quote limited by codec support, especially xbox. But later could play SD content fine and serve as frontend for wmc - aka live tv and great dvr (6 hours pause for example)
