Here's a video of it in action.
If you haven't heard of this, it's an idea the folks that run the Steam gaming service for PCs have, where you can run Steam on a big screen TV, say in your den or living room, with a controller.
Currently, it requires that you connect your existing PC to the TV, and you can use a 360 or Logitech controller to navigate the entirety of Steam. You can even check the Beta out on your PC and mess around with it, if you're not inclined to hook your PC up to a TV and kick back on the couch.
All of this appears to be leading up to what has been rumored for a while, now--a Steam 'console', if you will, or a small form factor PC that is capable of handling current, new, and past games that you can put with the rest of your A/V hardware and not have it stand out.