It still does not say desktop replacement. It says it can be used for some of the things you would do with a desktop, that is a big difference from saying it can replace your desktop.
My 256meg Pi runs XBMC great, it surprised the heck out of me. But that was not what I bought it for and is not what I use it for so it was just an added bonus.
I will be buying one of the new 512 Model B boards to be a media player for sure.
I might get a model A board to use for an embedded application as I do not really need an RJ45 port and I find the only thing I use the USB for is a wifi dongle as I run my existing board headless anyway.