I've done similar.
Laptop PC, lid closed, all battoned down (never turns off), picture goes direct to PC input of a Pioneer 42" LCD for *all* use, even e-mail.
Use an infra red remote keyboard with a combined trackball mouse from the sofa some 11'/3½m away.
Audio goes direct to a Sony receiver (amplifier - which, to be fair, Scumbag, is also a terrestrial and satellite radio tuner). 7.1 Surround.
We have an internet connection from Florida to a UK based Skybox+ so we can keep in touch with UK programmes, we also use internet radio for the BBC (just a five hour time shift).
Works a treat.
Our HD DVD (dammit, bought before the BlueRay argument was solved) also runs directly into the receiver) though if listened via the "DVD" input selection there is a noticable time delay and sound is not in synch with the picture. If we use the "Video 1" setting, it's perfect.