The Tuxbox is a project designed to make a console and base it around linux.It will have several other capabilities, such as DVD playback, MP3 manager, multi-user e-mail, etc., but it will be a gaming console at heart. The project is trying to succeed where indrema failed. The console would run its own version of linux and be based on commercial hardware.
You can help make the box at http://www.tuxboxproject.com/