Desktop pc's can be incredibly small if they are laid out more efficiently inside. There's an awful lot of space in most pc cases, to allow for add-ons like bigger fans and extra drives. This machine just looks like it has been designed to fit in with other consumer media electronics.
The concept of consolodating all of your consumer electronics into once device I don't see as being bad, but 'real' media center PCs don't IMO offer the best value for money way of doing this.
I feel the future of the media centre concept is not making the computer fit in with other kit, it's hiding it away. Technology has now developed to the point when the only device which must still be hard-wired to the computer is the screen - everything else can now be done wirelessly. It's perfectly possible to have your dream media center in a beige box in your office (or tucked away in a cupboard) and just run a single cable out to drive a nice big display in your living room. Even that cable might not be necessary for much longer - granted, there will almost certainly never be wireless VGA since it needs a high quality inteference free analogue connection which wireless cannot provide, but a wireless DVI-standard is probably inevitable.
Current trend to produce kit which looks like a DVD player to slot in under your telly might well be short lived - the day when the system unit itself has nothing physically connected to it except the mains lead itself and so can be located out of sight isn't that far off.
There are also much cheaper remote controls and cheaper (and sometimes free) front end interfaces available that can run on standard Windows XP without needing to go down the expensive route of getting a media centre PC with MCE on it.
This is what I'm looking at doing myself - my desktop is now all but redundant, it just sits in the corner of the room (with nothing at all connected to it but a mains lead) serving files to my laptop over the wireless network. Yet it's still a very respectable machine, so I am looking at giving it useful work to do again by re-vamping it as a media centre-esque device to replace my existing A/V kit. Of all the upgrades I have planned, taking it out of it's beige steel tower case isn't even on the agenda - I plan to have it hidden out of sight.
