I've seen a very small black case, infact no bigger than a standard VCR...
would be ideal to connect up to TV, and play retro games, watch dvds, divx and vcds
get a wireless keyboard and mouse, you can get a wireless keyboard with a built-in touch pad (like a laptop)
a couple of wireless gamepads
the spec of the base was close to your ideal spec, but a Nvidia mainboard with an onboard Geforce 4
You could get one of those editable launcher programs, build your own menu for each system or game!!! and extra options to run mediaplayer!!! for vids and music
Tiny tried this idea, it was called takcarmi or something like that, was a piece of over-heating shit though!!!