On a side note...
I have a 4Gb Xbox which I got specifically to use as a Media Extender (works with microsoft media centre) rather than a games machine. But not really for downloading media, but serving local media.
I have a 32" monitor to which it's connected as well as to my network via a homeplug adaptor.
The only "TV" in the house are the two tuners in my PC. We set the PC to record series or films we want to watch, then when we fancy watching them, just use the xbox to show them on the monitor, served from the PC. We can also watch live tv over the network at the Xbox from one of the two tuners in the PC.
Last night I also set up iPlayer on the Xbox for the first time. Worked a charm. Whatever compression Air is using these days it's bloody good. No buffering, no cliff edges, and no pixelation. Just good quality streaming.
I also own forza 4 too, because it would be silly not to