Given the price, I say NO!!!!! A modified XBOX with an upgraded HD and XBOX media center won't cost you much more and unlike that machine XBMC is constantly being updated (minor updates at least on a weekly basis and major updates every month or two). It supports formats that the standalone you linked to won't (ie Quicktime, Windows Media Player files). Also unlike that standalone, with the XBOX you get the option of using an upgraded HD OR a disc drive should you need it. For more info on what the XBOX can support once modified take a look at http://www.xboxmediacenter.com/info_project.htm
EDIT Just noticed that the thing doesn't come with an HD for that price. You can definitely get away with a modified XBOX for less than that and if worse comes to worse and you don't have the funds you still get a stock 8GB HD for a few files and you can run things from disc in the meantime.