Are you picking a single technology to allow your parents to watch movies? Or are you selecting a control point for your parents as they age in place?
If you are selecting one technology, I would go for the Xbox. The gesture control will be manageable for them. Learning to use a game controller is going to be very difficult, and frustrating. The push downloads will be acceptable, they expect magic technology to demand some compliance. The capacity for audio and gesture interaction will generally be useful -- obviously I am advocated for Kinect. If you look at the work at Georgia Tech, IU and U Washington on this you will find that alternative modes of interaction, like audio, tend to be preferred by elders. In part because it makes sense as an interaction, and in part because they end to dislike handheld devices. Ok, this is snark but remote changes and handheld devices can be overly complex:
A general purpose computer is a bad idea unless you want to engage in some serious security management and tech education.
Another driver is what you, as apparently the family technologist, use. If you can provide remote support, that is nice. What is really good is when the technological interactions enhance the interpersonal interactions. One very common fear of elders is that the technology can be a substitute, not a complement, to f2f interaction. So if the technology becomes a source of interaction now, then later adoption of technology (for your peace of mind and their health) will be easier. SO, for example if you want a monitor to text you when the door opens if granddad gets a little early dementia, their experience with this technology has a very high degree of probability of influencing later technology adoptions.
Ideally, have them over at your house to interact and if you do not have an Xbox, then take them to Best Buy Work with them. Judge their comfort level with various interactions. Do not tell them it is simple. Please do not tell them that because it being simple will shut down their responses. Show them physical and audio interactions. Talk about this "fit" not better/worse.
Now, I am basing this on academic studies in design for elders. Some of those studies can be found in the open access journal Gerontechnology http://gerontechnology.info/index.php/journal/issue/archive
and some of the Aging in Place and design for elders. While I love the construct of Aging In Place, I have only very strong disappointment for most of the books that use those terms. Also, many of them are wildly overpriced.
You might like "Design and the Digital Divide: Computer Support for Older and Disabled People" by Newell.
Remember this is a first tech choice. As they become more vulnerable, their acceptance of tech you choose will be informed by this experience. Patience with them now will pay off later.