I don't think you'll be able to do what you want without WMC, Media Center Extenders are basically a terminal services client that will pass music/video from the WMC server, and I'm pretty sure a touchscreen won't work with it (since it's just remote controllable, no mouse control on those boxes). I don't think any of the current media boxes (MCE or otherwise) support touch-screen. Now, you use a video cable extender, and serial/usb extension to connect to a remote PC somewhere, and just pipe the audio out to a stereo, but that might not be practical either.
To get more what you're wanting is probably going to require a PC of some type (an Intel Atom-based ITX mobo & touch screen would probably work great, couple that with a lower-cost SSD hd like I'm using on mine, and you don't even have to worry about speakers near it). If you go that route, definitely max out the memory on the Atom board, because you'll have to turn off the paging file on Windows to make it work with the SSD, and keep the lifetime of the drive as long as possible. The total cost for my board, memory & ssd were well under 200, and it works great headless in my old Wurlitzer juke (I still need to clean up my wiring, but like most of my projects, once it's functional, I tend to put off the clean-up). It's also fast enough to run some of the more CPU intensive programs (it'll run mame pretty well on the older roms, only the newest games wouldn't be playable). The one I have IS the 330 cpu (dual-core), as it was only a few dollars more...