That's old news and no news really. We've been to
Xi3's website already and though they worked with Valve a while back they were just one of several and should not be considered official Steambox providers. They look cool but yeah, £1000 or there abouts is way too much for most. Plus, upgradability with a thing that size? i don't think so! No getting away from the fact a PC is still more or less required for the living room even if it's micro-itx sized or somesuch.
The Valve pad looks really good as a concept tho. I hope the get it right in production as I'm really keen to try it out. I can't see any reason (beyond comfort and ergonomics as I can't tell what size it is) it wouldn't be good. Provided it hasn't been designed around Gabe Newel's hands or some adolescent American kid then we should be ok.
It's about time someone tackled the thorny issue of replacing the deadly keyboard/mouse combo. With that feedback it's still a very intriguing device for simulating textures and stuff.