I am a bit late in the game here, but I have been using XBMC for a couple years. It is my dashboard because no other dash comes close to it in features. There is one game that I like that won't run under XBMC, so I use Avalaunch for that. And when I want to ftp large files, I use Avalaunch and Qwix because of the great speed boost you get.
As for a remote, I have a Logitech wireless controller that I use exclusively. I have the Xbox remote, but I never use it. I also have a Harmony that I use for everything else, but I never got around to programming it for the Xbox.
Somebody asked about upgrading to a new XBMC version:
The Simple way is to just download it and ftp it to the directory where it is installed overwriting the files. I would not recommend that though because there are so many changes every day that there may be conflicts with whats in the cache and the config files.
The thorough way is to:
1. Delete the XBMC directory from your Xbox,
2. Clear the X: Y: and Z: and e:\cache directories
3. Delete the XBMC Save directories which are E:\UDATA\0face008 and E:\TDATA\0face008
This needs to be done without XBMC running of course because you can't delete files that XBMC is using.
-stonefry