Small PC game box

[grow14me2]

I got a Wii and X-Box, but when Starcraft came out, I was wishing for a small computer that I could just plug into my LCD TV (via HDMI) and just start playing.

So now I am thinking of putting such a system together.

I would want to use:

1) a really small case, as small as possible - I am even thinking of using a Home theater case

2) a micro ATX mobo, running 4 GB of memory

3) I would need to fit a descent graphic card in it, one that has HDMI and could play Starcraft, Quake Live/III and WOW.

4) I am looking to have the minimum power needed for the system, all I am going to do is run these games on it, and maybe play a movie I rip to it.

5) 5.1 sound minimum, I could use on-board sound but my home theater system has a great Onkyo SR607 receiver so the on-board sound would have to be good, but I could also use a sound card like the Fatal1ty X-FI I have in my full size computer.

I don't want something too powerful, because it is going next to the game consoles in my living room TV stand, and I don't want it to be a thermonuclear oven cooking everything.

Just a small box that I can use to play a few PC games in my living room.

I am looking to build this up for around $600.

Any feedback on the concept, any suggestions for the mobo, CPU and graphics card?