I have been playing with LinuxMCE a fair bit in my new house, it does have its limitations as far as video playback is concerned but that is just one of the many things it can do. People often mistake it for a HTPC when in fact is much more.
The devs over at LinuxMCE have done some really impressive things. Touch Orbiter for one. I think this was a huge step forward and allows almost any device become an Orbiter, because of this I went and purchased a mini2440 with a 7″ touch screen (http://www.friendlyarm.net/products/mini2440) I was hoping at porting over the Touch Orbiter to this, but as it turns out someone already had. It still needs a little bit of work (like turning the LED backlight off after a period of time etc). But apart from that it seems to work really really well.

I am in the process of writing up a guide to build an embedded linux OS for the mini2440. While there are so many guides out there I did find that none were exactly what I need, that said they did help me a lot but I think it would be best for me to write a guide up specific to installing the Touch Orbiter on it. Once this is done I will post it here.