As a long time PC gamer, I have to admit the 360 is a pretty attractive gaming addition (not replacement). I'm using it on a DLP projector with 720p input (cost is not that much more than a high end LCD monitor and much less than a plasma or LCD TV). I am enjoying a 10 foot diagonal screen size with VERY smooth gameplay.
It is interesting to compare some of the cross platform titles as well ...
Need for Speed Most Wanted is a stuttering mess on my PC, even after much tweaking (and many others have the problem according to various discussion threads), but runs very smoothly on the 360.
Call of Duty 2 is also a challenge for most PC's to run but again it seems to be highly optimized in the 360 version.
King Kong for the 360 looks absolutely amazing though I don't have the PC version to compare it to. Runs without a hitch.
And these are launch titles!
My PC is no slouch either (X2 4400, 2GB RAM, 7800 GTX) and the graphics card alone was more than the entire cost of the 360 premium system!
For less than the cost of a single high end graphics card, it's a no-brainer to pick one up. You can even hook it up to your monitor if you want to! Even if the 360 loses its edge after a few years, how many of you can say you can still count on your current top of the line PC graphics card to deliver top performance in 3 years? Odds are you will have gone through a couple of video cards in this time (I know I have).
I don't plan on getting rid of my PC for gaming as there are still many PC only titles but in some cases I am wishing I had purchased the 360 version instead of the PC version to enjoy smoother gameplay (COD2 and NFSMW). When Oblivion comes out, it will be a tough choice between the PC and 360 version.