To be fair, we're not really looking at the 8500 card as a potential upgrade for a hardcore games system (that'd be silly). Unless you're content playing your favourite games at 800 x 600 without any image quality settings on (and hey, that's all of us, right?) there's just no way this will ever cut the mustard.
With its PureVideo 2 engine, though, the 8500GT is a very good choice for a media centre. Small, low-powered and passively cooled, it'll relieve the CPU of a large chunk of its work when decoding hi-def movies, meaning you can go for a budget friendly processor too.
With one significant caveat - there are no HDMI-versions of 8500GT on the market yet. If they come without the ridiculous premium the X1600 carries, then they'll be the obvious choice.