"A desktop OS will, and never will, be suited for anything other than a Desktop... it will never work on the Living Room."
Based upon what? Right now I run a Windows 7 system via my 50" Samsung in my living room. I use two bluetooth mice and keyboard. The keyboard is rarely used. My system works perfectly.
To get to a movie or TV show you double click My Computer and double click the mapped drives to the movies or shows. Using the scroll wheel you whip through hundreds of movies or subfolders with the shows. You want to instantly get to the end of the list, use the scroll bar. Double click on the one you want.
Media Player Classic opens and you can use the mouse to instantly zip through the movie or show via the seek bar without using the slow "fast" forward or rewind buttons you get with a remote. You don't realize how much fast forward and rewind buttons suck until you start using a mouse to traverse through videos. You want to go half way into the movie, one click and you're half way into the movie. Want to skip to the end, one click and you're at the end. Instantly.
You want to turn up the volume? Scroll up on the mouse. You want to turn it down? Scroll down. You want to pause, click the mouse. Want to unpause, click again.
Tired of watching TV shows or movies on your TV? Double click a short cut to your "rock" play-list on your desktop and the music instantly starts. Want to find a specific song. Double click on the Winamp library, get the song you want, and listen to it.
I have friends who use their PS3s and 360s to access content. That works. You can even buy remotes for them. But I can get to my content much quicker and with more ease than they ever could.
And one more thing, I don't have to wait for some manufacturer to play catch-up. If some new video codec or wrapper is released, I can instantly watch it in my living room. I don't have to wait a few months in hopes that Sony or someone else will play catch-up and include support for it.