Game controller

Currently: A wired 360 controller. (GREAT integration with the OS)

Next steps: Purchase whatever's needed to get the wireless 360 controllers working.

Games

Currently: A variety of emulators. AutoHotkey doing emulator-specific joystick⇒keyboard mapping when an emulator needs help with the joystick.

Next steps: MORE GAMES! Better integration with the joystick (OSD pause/reset/exit/volume).

Front end

Currently: Explorer + double-click on the game you want to play. :(

Next steps: Get some sort of front-end that lets you select which game system, game you want to play, or which music / video / web page you want to view/play.

Video card

Next steps: Get one that supports HDCP output. Preferably get one that supports DirectX 10.

Browser

Next steps: Get a full Firefox build with spatial navigation working (or just use Opera), and be able to control it with the 360 D-pad. Make the left analog stick be able to scroll the document (exponentially?), and make the right analog stick control the mouse (for HTML image-maps, or even more importantly, Google maps).

Speakers

Currently: Stereo (from TV, no less). Sometimes earbuds if I don't mind feeling tethered.

Next steps: Either get a decent surround-sound speaker system, or get a 3-D ⇒ headphone encoder, and some way to not feel so tethered with the headphones.

Audio routing

Currently: TV routes stereo audio. PC audio card does very minimal mixing.

Next steps: Maybe get a cheap 4-channel audio mixer? (though how would one control the volume from the couch? Does mixing, rather than priority switching, have any real-world downsides?)

HD-DVD/BluRay drive

Next steps: Wait for a winner to emerge, or for BluRay+HD-DVD drives to be available. Wait for prices to come down. Figure out the details regarding software and video hardware.

Keyboard+Mouse/Trackball

Next steps: Choose and purchase one. Maybe just get a separate wireless mouse to go with my wireless KB? Look into whether it's remotely practical to get a Wiimote-like input working for the PC.

USB KVM

Next steps: Get a setup where USB keyboard, wired controller, etc. can be switched between computers, and with XBox 360. See whether it might be feasible to simply stick a USB hub underneath the couch, with an extension up to the computer.