"However, isn't the Xbox an all inclusive computer/game console solution?"
I don't think so. Some cats will have Linux on it in a blink, but Linux just ain't OS 10. OS 10, is an OS you can geek on AND use AND have a good time doing it. I have a BeOS machine now to geek with (And a C-128D) and I have to admit that I boot into XP more than I like.
Not to bag on folks that like Linux, but it ain't my cup of tea... I saving for a new Mac currently. (I sold my old one in order to buy a springbar tent (canvas, best tent in the USA) and I've missed my Mac since about week two.)
"The OS would have to be as solid as OS10.4."
OS 10 just works. Then if you want to start screwing around with it? It is there for you as well.