We usta use our Xbox (original) with XMBC to view pic, listen to music, and play videos... Since that time I built a media center pc running MythTV... It now does all the xbox did + record TV.
I store all our DVD's 3 ways, originals on a shelf, ISO's on NAS, and mkv(matroska video file) in sizes 350 to 500MB each depending on content. I don't think any of the consoles will play this format. The Wii is prolly not powerfull enough for HD... I can't comment on the PS3, but I dont like the interface on the 360 for all of the above... music is the worst for me (only really used any of it when we 1st got it "just to see"
So anyhow... MythTV = Media Center, TIVO(+auto commercial skip), DVD player, MythGame(for all the emulators including MAME), web browser, security cam viewer/recorder, CallerID box, FAX receiver... much much more... Don't know how we ever lived without it