It's interesting because I remember reading an article early on in the life of the 360 about why an emulator wasn't immediately hitting the web. The guy basically said (paraphrasing) consoles are dedicated graphics rendering machines. PCs won't be able to match that level for some time because of all the behind the scenes operations.

That said I would assume they have found some way in the development to really jump up the potential of that kind of graphics system. Although, the multi-media thing doesn't surprise me. Consoles are moving towards being a source medium for streaming of media. Integration with all your home devices to stream things to the TV is what's trending.

Still, this is just the rumor phase. We'll see what they unveil at the end of this year, mid next year.

I heard that future iterations of DirectX are going to try to stomp out some of the high levels of overhead and latencys.  I wouldnt expect anything soon but it would be nice to get it sooner rather then later.