Der Profi,
Just for the record, the PC I use for my entertainment center is in my family room. My family room looks like a family room too, except for the 54" big screen and the front tower speakers. The surrounds are flush mounted on the back wall, the subwoofer is behind a loveseat (in a corner), and I use one 5 shelf cabinet for home theater gear, DVD player, etc. The networked PC that I use, is located directly behind the cabinet (which is also located in a corner) and is oriented perpendicular, making the cabinet as close to the wall as it would be even without the PC. I don't need to be able to get at the PC, it doesn't even have a CD-ROM drive. I agree there is a little white noise from the fan, but I was careful to to use a quality fan and insulate the case well. The noise is very faint and not much louder than my Dish Network receiver's fan. Bottom line, you can't see the PC, and you can barely hear it.
I mostly use it for playing mp3's and occasionally surfing during commercials, but because it's a PC, there is much more functionality than a dedicated mp3 player. I loaded it up with games for my kids, I use it to store backup images from other machines in the house, and this xmas, I even showed our digital family pictures to my visiting relatives on the TV.