PCs in family rooms?

Microsoft and other companies want to turn the PC into an entertainment hub - let families watch TV or a DVD, display their trip's slide show, and listen to music all with a PC in the family room, the New York Times reports. Ok. That consolidation can't hurt on general principle, but our family really doesn't need to have it all happen on one big screen. What happens in our family room is everybody sort of watching something on the big screen while one family member surfs the Web or instant-messages his friends (with a wirelessly connected laptop). We like having that little screen in the family room, too, so we have the IM-er with us and so we can generally keep tabs on kids' online activities. So we really don't mind having separate screens for TV/film and the Internet. How does it work at your house, though? Does having everything on one screen make sense for your family? The Times does report that there are other drawbacks to having the PC set up as a media center - for example, the picture quality of the video on the screen (so far). But read the Times article for a good look at all the arguments, pro and con.