It's not doing too well in Japan at the moment. The largest problem is that it's a bit large from the Japanese consumer prospective. Also it doesn't have alot of "Japan friendly" games. The only games to have really made an appearance in the Dengeki top 50 for Japan are Halo, DOA 3, and Project Gotham. Everything else kind showed up for a week and dissappeared. I guess it's still a bit early to talk about Halo though since it's only been out a week, but it made the top 10 so I think it deserves a mention (9 on dengeki and 5 on bloomburg).
As for buying the Japanese Xbox for the controller... why? An American version of the japanese controller is coming out. Also if you really needed it that bad, you could just buy the japanese controller and save yourself some massive shipping costs. Not to mention that so far, more Xbox games are out in America. You japanese exclusive games are Shikigami no Shiro, Metal Dungeon and Bistro Cupid. I guess if you really wanted to play Bistro Cupid then more power to you.
<< About as bad as the Dreamcast did. >>
Wrong, Dreamcast did better. 😛 Dreamcast regularly gets games in the top 50 even now in Japan. Sega has a bigger cult following than many people realize.