I own 3 Xbox 360s that are primarily media center extenders. It's a nuisance to have to find somewhere outside of AV cabinets for them, but other than that they work beautifully. Something to remember, the newer 360s are significantly quieter than the originals, and a lot of the running noise is the optical drive which doesn't run in extender mode. The noise has never bothered me.
Throw in the performance boost over my DMA2100 and they do a fantastic job. I'd prefer a slightly cooler running option, but they're cheap now and they have a lot of room for updating.