There are SVN branches that offer front end support to different live TV backends. MythTV is a viable backend with XBMC.
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I've been using XBMC for over 5 years now. Up until last year it was completely on two XBoxen. It was fine for it's time, but as more and more HD content became available, the XBox started revealing its limitations in a big way.
I started using XBMC on a computer with the Live version on a USB thumbdrive. I would boot the thumbdrive on my work laptop and plug into my HDTV via a VGA connection. Last summer I built a full fledged mini-ITX HTPC with a Zotac Intel motherboard and integrated nVidia graphics. I don't use a mouse to control it. I use my Wii remote or a PS3 Bluetooth remote. Both work well. The Wiimote works almost completely out of the box, the PS3 remote takes some work.
If you visit the XBMC boards, you see that there are plenty of people using it on computers both hooked up to televisions and those that aren't. It's available for Linux, Windows, and OSX. There's even a GSOC project for porting it to a Beagleboard platform.
If you can't understand why someone would use it on a comp, then you haven't seen it lately.