The Pi makes a fantastic media center when combined with XBMC.
Given the price, I am pleased with it, but I wouldn't recommend it as a media center for the non-tech savvy.
I reckon you could fix the lag of the GUI if someone implemented Raspbmc/OpenELEC with Wayland instead of X-server. Not much has to change for this to be possible. Only the power switch & IR sensor would have to be apart of it. Remote could potentially be third party and WBMC would a man hours issue.
1 - http://www.phoronix.com/scan.php?page=news_item&px=MTQ4NDE