With Ubuntu Linux 12.10
Let's say you have neither the desire nor the inclination to spend $100 (or more) on a Windows 8 license. Let's say you don't care for most Windows games, and you're okay with getting your hands dirty by delving into the command line once in a while. In that case, installing Linux on the Zbox could be your best bet.
I gave it a shot, largely to see how difficult it would be to get everything working. My past experiences with Linux distributions have been... interesting. I have not-so-fond memories of wrangling with audio support and wrecking X.org while trying to enable hardware 3D acceleration with binary drivers. Some people claim Linux is only free if your time is worthless, and I've always tentatively agreed with that sentiment—at least as far as commodity PCs are concerned. (I'm well aware of Linux's success in servers and mobile/embedded devices.)
This time, however, I was pleasantly surprised.
I grabbed the latest 64-bit release of Ubuntu Linux (version 12.10) and copied it to a USB thumb drive using the Universal USB Installer utility. The installation was completely painless—easier in some respects than the Windows 8 setup. Graphical performance in the freshly installed Ubuntu desktop was quite poor, but that was easily resolved by hopping into the Additional Drivers settings pane and installing the latest experimental Nvidia driver. That only required a handful of clicks, and I didn't even have to visit the Nvidia website. Neato.
My first act as owner of a freshly configured Linux build was to install Steam. I mean, how cool would it be to get Team Fortress 2 working on this thing? Right?
Steam for Linux is still in beta, but getting it running in Ubuntu is surprisingly straightforward. I just followed the instructions here—which, as it turned out, simply involved downloading and running the Steam Client .deb installer. The Ubuntu Software Center took care of the rest. After that, I was able to log into my Steam account and download some games. A few of the titles I'd purchased for Windows (TF2, Braid, and Trine) were listed in my library. I also had the option to peruse Steam's growing collection of Linux games (mostly casual and indie offerings), all within the familiar Steam interface.
And yes, Steam's Big Picture mode worked. Animations were smooth, and the software even recognized and responded to the Zbox's bundled remote.
Overpowered with giddiness, I fired up Team Fortress 2. It crashed once in the server browser, but that didn't stop me. I eventually made it into a multiplayer game and started fragging away. At 1280x720 with medium/low detail settings, no antialiasing, and no HDR or motion blur, frame rates peaked in the triple digits in quiet areas and settled to around 30 FPS in heavy combat. That would have been more than acceptable, except the game also tended to skip at random intervals, especially right after a level load. It was like the system was running out of memory and the sluggish mechanical hard drive was picking up the slack.
In the interest of scientific rigor, I installed TF2 in Windows and tried the same map at the same settings. I even managed to find the same multiplayer game. Peak frame rates were a little lower this time, but there was no trace of the skipping I'd experienced before. The game ended up feeling more fluid overall.
I'm not sure what was wrong with Linux, and I unfortunately didn't have time to troubleshoot. Our contact at Zotac didn't seem to know what the problem was, either. That said, considering Valve's Linux ports are still in beta, and considering how easy it was to get TF2 working, these early results are quite promising. I reckon things can only get better from here.
My gaming session over, I looked into a suitable substitute for Windows Media Center. The most popular alternative seems to be XBMC, which has a similar 10-foot interface with all kinds of nifty functionality built in, including support for remotes.
Version 11 of XBMC was available in the Ubuntu Software Center. I had to pop into the command line to install version 12, which had come out the day before, but all I did there was cut and paste commands from the XBMC website—not exactly rocket science. Once I was done, XBMC happily obeyed commands from the Zbox's remote, and I was able to use the Wi-Fi to play back content across the network. Audio and video worked smoothly (even in HD), with no tweaks or ugly command-line wrangling required.
Even more impressively, the remote's sleep and wake buttons actually worked, both in XBMC and at the Ubuntu desktop. Being able to wake up the system with the click of a remote is a crucial feature for an HTPC. The Zbox did it beautifully in Linux, right out of the box.
All in all, I think it's fair to say Ubuntu is a very viable—and, indeed, compelling—option for the Zbox. Yes, you're going to miss out on serious Windows games... but the Zbox struggles with those, anyway. Ubuntu is a nice fit for the hardware, both in terms of driver support and capabilities.