I agree with some of this working on Documents is an inconvience.
But movies and games are way better.
A media center is ok for certain things as well, but you can't surf, or at least I haven't seen any products that connects to the internet and you can't play your computer games through media center. Media centers are good for streaming video content though, but you might be limited to WMV movies and other oddities as well.
I'm not so sure you and I are talking about the same thing, I'm not talking about an HTPC. Are you familiar with internal tuner cards? They turn your computer into a television. You can do everything you could always do on the computer just add the ability to watch television.
So you could watch ESPN and surf the web at the same time. Or watch Food TV and work on a Word file at the same time.
I'm a big proponent of the Samsung HL-S series of DLP. My favorite being the HL-S6188W, as far as bang for the buck goes it simply can't be beat. They also make the HL-S6187W which is about $500 cheaper but it lacks PIP/POP, a QAM tuner, Firewire and USB ports.
You're right about movies and games on a large screen 1080p television being better. Although there are certain monitors whose native resolution can go higher than 1920 x 1080 so the picture could be crisper and in turn better on certain intensive pc games.