Well, as a TTTPC (Tray Table Theater PC), it would be awesome! Bright, colorful, and in your lap, it would probably look like a 10' diagonal wide-aspect screen.
Kidding aside, hopefully it will work well as a HTPC sometime - when Apple gets it's butt in gear (or some third-party developer) and there's a DVD player that will pass AC-3 or DTS out to a USB SPDIF interface and does better deinterlacing. Plus, until the hardware and OS have better control over the video resolution and timing, a Windows-based box is still going to be a better solution for any kind of high-end (read, projector/digital audio)-based home theater applications.
The new Titanium is a beautiful piece of hardware, though and in just the right situation, it might still make a pretty sweet HTPC - especially if you need portability.
See the "
Mac as a HTPC " thread for more info...
SC
