I think the main reason I prefer my Xbox modded is that I have all my media needs (bar the Internet) through one medium. I don't need to hassle myself with multiple TV inputs: It's Digital TV transmission and Xbox (MP3's, DVD's, Games, Emus). The XB emulators don't have any technical improvements over their PC counterparts (they're mostly PC ports anyway). So I guess it's a case of whatever configuration suits your lounge best.
As long as no DRMs get involved, it's a really good idea.
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As long as no DRMs get involved, it's a really good idea.