I've got an extra computer hooked up to the TV, so it would work fine for me. Quite a handy thing. Besides allowing the kid to play educational games comfortably in the rec room, it gets news and weather, plays my MP3s and DVDs, and makes Rifftrax much easier to enjoy. Just another unwanted machine somebody gave me. A bit more RAM, a video card, a Linux OS and a cheap remote control, and it's all ready for movies on demand.
Yeah. The thing these days is you can put together a MiniITX or similar box for like $200. It'll play DVDs and be region free, play any media you download, older games, etc.
Newer video cards also have HDMI, so connecting newer computer to HDTVs is incredibly easy.