I think you make a lot of valid points. My feeling and experience with Linux is that it can be a royal pain when you're updating or upgrading. Often applications break when updating and if you upgrade to a newer version of the OS you may wind up with an unusable system. For those reasons, I like the terminal because it allows you to fix things fairly quickly, but that's horrible for most people.
Like many people I run Unix and Linux servers in my home. I use XBMC for my HTPC and that's Linux, but it also has issues now and then and I've had to reinstall. That being said, I can do a lot of cool things with it that may cost a lot more if I were using windows only.
XBMC != linux. It can be run on linux, and there is a live distro with xbmc included, but it is not linux.