YONEXSP, could you perhaps provide a link that supports this claim? I just did a quick check in the Xbox forums and I didn't see anything that said MCE is no longer required. This would be very big news if it were true.
Even bigger news (for me) would be an OSX app that would allow video streaming to the Xbox 360. It'll happen eventually...
Ed, I can't comment on the quality of the Xbox vs. a good HTPC, but Clarence and Cliff have both claimed that the Xbox offers both better picture and performance. That's good enough for me... or at least it SHOULD be.
Just for fun I tried to hook up my PC to my G70. The HD looks so good on my 21" CRT monitor that I just wanted to see what it looks like on the PJ. I've never been into the whole HTPC thing so this proved challenging for me. I didn't really have the patience for it that day. Maybe another time
I recommend the 360. It's good fun.