I'm thinking about this also, what I'd do is get an Apple TV, an LCD monitor and a VESA arm bracket and bracket the monitor to my hifi rack so the ATV would be like a visual CD-Player if you will. Also I'd like to be able to operate the ATV independently of my Plasma.
I've looked at some Dell 20" widescreen models such as the E207WFP but not sure if they support 720p as a native res or whether there will be black lines on the screen...
Shame as the Macbook I'm using would be perfect size and screen res!
Incidentally I'm not too interested in movies or photos just music and album art, I've already got an Airport Express but can easily find a home for that in my bedroom.
Don't know where I'd find out about 720p monitor compatitbility, any ideas anyone?