But has anyone done this here, essentially used a PC in a console set up.
I have, but only by running an HDMI cable from my tower to my TV, plus using an Xbox controller and Steam Big Picture.
Its good and its enough to have me considering buying an HTPC chassis and building a dedicated rig. But I wouldn't assume you'd get the same "quality" as a dedicated console. By that, I mean you are still hampered by developers not having to adhere to a strict set of rules. eg. it pisses me off in Far Cry 3 that I can't start the game from Steam - I can only start Uplay, which then starts the game. There's no controller support in Uplay, meaning I have to revert to a mouse just to click a button.
Having said that, it blows my PS3 away in terms of image quality. I'm also an IT professional, so I'm kinda willing to put up with the quirks of the PC. If you want something as smooth as a console in terms of interface, a PC/console hybrid isn't for you. If you want the best gaming experience and can deal with the fact that you are really using a multipurpose platform, then it offers more possibility than any console could.
However, I would also recommend building your own if you want to go that route. I don't think these OEMs offers good value-for-money when it comes to premium systems.