Xbox is basically an 800Mhz odd PIII which comes in a nice small case and costs less than £100.
Don't know about you, but I think that is a pretty good spec for SME in a small network environment, and I challenge you to find an equivalent PC for the same money.
OK, so expansion potential is close to 0%, but for a home network I think it would be great. Would certainly tempt me to go uot and get one (I am no great gamer)