They've just done a demo of it running XBMC - and very smoothly too, playing a 1080P H264 video:
http://www.raspberrypi.org/archives/571
Could this be the ultimate hackable media player? Oh and it has HDMI-CEC capability too apparently...
Also I guess once the OS distributions for it mature it could easily be a PVR too with the right tuner hardware and drivers...




