#1 - The x360>MCE allows you to watch live TV through your xbox, this means that you can basically always use the x360 even to just watch normal TV. Since the TV will be played by the 360, game invites can pop-up while you are watching TV.
So you could picture the scenario where you're watchign a show you really like, but then get a game invite from a friend you haven't talked to for a while. You could pause the TV, switch quickly into Live! accept the game invite, (at this point you'd have to get up and put the game in) play online for a while, then when finished simply go back to the dashboard, unpause your TV show and resume where you left off.
It also lets you play back recordings created by MCE which XBMC can't do right now(workin on that too).
It would also give you the ability, with a dual-tuner capture card, to record one TV show, while watching another. So in a scenario where 2 shows that you want to watch at the same time are playing, you record one, and watch the other. For example...remember when Ultimate Fighter and The Contender were both on a 9:00 on Mondays?? This would come in handy....
This is all pretty cool IMO considering you can do it all witohut leaving your couch, just using the wireless x360 controller, and is definately a step beyond XBMC.
#2 - never tried streaming with HD video so it's hard to say, but the xbox360 will be doing the majority of the processing that's for sure. Most people PC's are simply not fast enough to playback HD video as it is so they couldn't depend on the users machine to do the decoding.
