Meh, it's ok. Of course, I barely even use my PS2 nowadays... so I'm not exactly the target market.
But for those wondering - no, you couldn't just use one of these as a Mac. The CPU is much simpler, for one. PowerPC does not equal G5, as has been said. Video card will probably be nice, but it's customized just for the xBox (and I'm sure M$ gets a small discount for ordering, like, a billion of them). Motherboard and architecture are completely different. And I doubt Apple will still have 2.7GHz as their top end by the time this thing is actually for sale (I would hope... but lately, who knows).
That being said, I'm sure it will fast, and great for you 'fraggers out there. And I'm sure they'll sell a bunch. As has been said, I think some people may not even need their PCs anymore (SOME people, I said, not all). I'm still waiting to see what Sony will do with the PS3, and if I'll need to upgrade.