Valve Working on 'Steam Box' Gaming Console

Rumors are coming out that Valve - the company behind the steam Steam store and many popular games such as Team Fortress 2 and Half-Life - are considering getting into the hardware business with their own home console. Gabe Newell recently said on Penny Arcade:

Well, if we have to sell hardware we will...We think it’s important enough that if that’s what we end up having to do then that’s what we end up having to do.
Newell also continued saying that they would rather work with people who know about making and distributing hardware rather than making it themselves. The rumor is that Valve has been making a hardware spec and the associated software that would make up this "Steam Box". It is said that the specs are to be a Core i7 processor, 8GB of RAM, and a Nvidia graphics card. The system will allow for multiple game services to be installed including EA's Origin, and will likely be controlled by a proprietary controller.

Many people are wondering just what OS the box will run. The obvious choice would be Windows for game compatibility, however many are guessing that it will be a version of Linux running Wine. The second option could allow for less resource usages as well as avoiding licensing fees. Many are guessing that the product will be shown off a GDC, but are unsure if Valve will wait until E3 for this announcement.