I have a 360 and I still use XBMC with my old xbox for any of my video playing needs. The 360 is setup to play all my media through TVersity, but the quality is usually worse than on my old Xbox with XBMC. I'm not sure about all the time, but I know MOST of the time when I play videos through xbox 360, my computer is doing extra converting on the fly to get it to play. This makes it look worse and makes my computer games lag when videos are playing. XBMC doesn't have these problems. XBMC supports all my formats without requiring my computer to convert them while they're playing. XBMC doesn't require a separate media center or separate software; you can just use file sharing protocol. After playing with Windows Media Center Edition and Media Center Extenders, I will probably never buy one and I'll stick with Linux + XBMC for future media expansion (OS price is not the issue here). Xbox is a little obsolete since it cant do high resolution video, but XBMC is far from obsolete. I can't speak about watching TV channels or anything like that, but for watching downloaded videos and playing music, XBMC has no competition. XBMC is probably only still around because without it there would not be any perfect choice for a standalone media player. One day Microsoft will learn to embrace a wider range of protocols and codecs, but until then there is a huge spot for XBMC.
As for the skin: looks Great! I'll try it, but I usually go back to default.