[sarcasm]Eww... it's got windows allover it.[/sarcasm]
Hell I've used a cheap netbook with a single core atom processor and crappy integrated Intel graphics as a basic media center (no high bit-rate stuff.) I'm not a fan of the fact that the graphics are integrated and used shared memory but as long as you aren't going to be streaming high bit-rate content I think it should work.
One thing to keep in mind is that it doesn't seem to have any video outputs so if that monitor breaks you are kinda screwed until you ship it to be replaced. Also it doesn't seem to be easy to upgrade so if you find it underpowered a year or two down the line you are kinda screwed.
If you are talking about simple browsing, office tasks and movie streaming then personally I'd just look for something cheap in a small form-factor like a Zotac Zbox. Easy to hide behind the monitor (comes with a mount that lets it hide behind some monitors.) I'd also recommend linux because it doesn't hog as many system resources. The zbox is less powerful but leaves you more room to buy a sweet ass monitor. The ion graphics are also quite suitable for watching high bit-rate content. However from what you have said the AIO looks fine.
(this is just a hasty example I could do some more looking if you are interested)
http://www.amazon.co.uk/Zotac-ZBOXHD-ND22-B-ZBOX-ND22-Mini/dp/tech-data/B004DUMMUE/
http://www.amazon.co.uk/VE278Q-Widescreen-Display-Response-Picture/dp/B0041RXPQY/ref=sr_1_9?s=computers&ie=UTF8&qid=1325164192&sr=1-9
Might want to ask on
http://www.tomshardware.com/ it's usually my first stop for hardware reviews and the forum members really know their hardware.