Well...
For flash, there are Mozilla ports to windows + linux. But of course, flash player is NOT open source. BUT, I'm pretty sure the windows flash program for Mozilla could be used of this browser/dash were a mozilla port (correct me if i'm wrong... but it should theoretically be possible with a little hacking) *btw, doesn't neccessarilly have to be a Mozilla port, because porting from the FireFox tree would indeed be a good idea* ...
Question, would the mozilla/firefox liscense allow the use of the xdk?
AND, although this idea sounded pretty dumb to me originally, it doesn't sound half bad right now to me. BUT, I still don't believe it would be efficiant (speed being a big thing)...
oh yeah, and let me add this.... It's not really harder to grab html from the net on the xbox then locally. It's VERY easy to incorperate network support. I mean, common. Practically most apps/emu's for the xbox have netplay/rss/downloading of skins/etc...