I'm using my 512 Pi for XBMC (via Raspbmc) and it has come a long way. Booting from SD but running the OS from a USB drive really improves the speed and navigation of menus, so that there is little to no lag now. I really enjoy using XBMC now (CEC passthrough and I don't even need a separate remote). For $35 and effectively using a device that was never designed to do what I'm using it for, I have zero complaints.
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I'm using my 512 Pi for XBMC (via Raspbmc) and it has come a long way. Booting from SD but running the OS from a USB drive really improves the speed and navigation of menus, so that there is little to no lag now. I really enjoy using XBMC now (CEC passthrough and I don't even need a separate remote). For $35 and effectively using a device that was never designed to do what I'm using it for, I have zero complaints.