"I'm still waiting for the day when Linux will become as seamless as windows " - you will be waiting forever. It isn't going after that market, although there are some distributions that do an awful lot of hand holding.
I've been using OpenELEC 2.0 betas for.. 6 - 9 months. I have my gripes with it, but its become my main video player on my most actively used TV. I installed from a usb stick onto a 2GB sdcard in an atom/ion-based Zbox, about $230 in hardware I used to run my htpc on, and performs admirably. For my setup, I did have to ssh into the machine and create some linux configuration files to get the sound working properly. Never even boot into the HTPC anymore.