New Gaming Rig or 'Steam Box' PC

PCPartPicker part list / Price breakdown by merchant / Benchmarks

CPU: Intel Core i5-3570K 3.4GHz Quad-Core Processor ($189.99 @ Microcenter)
CPU Cooler: Cooler Master Hyper 212 EVO 82.9 CFM Sleeve Bearing CPU Cooler ($33.24 @ Amazon)
Motherboard: ASRock Z77 Extreme6 ATX LGA1155 Motherboard ($139.99 @ Newegg)
Memory: G.Skill Ripjaws X Series 8GB (2 x 4GB) DDR3-1600 Memory ($51.59 @ NCIX US)
Storage: Seagate Barracuda 1TB 3.5" 7200RPM Internal Hard Drive ($64.99 @ NCIX US)
Storage: Verbatim 120GB 2.5" Solid State Disk ($85.10 @ Amazon)
Video Card: PNY GeForce GTX 670 2GB Video Card (2-Way SLI) ($279.99 @ NCIX US)
Video Card: PNY GeForce GTX 670 2GB Video Card (2-Way SLI) ($279.99 @ NCIX US)
Case: Inwin MANA136 WHITE ATX Mid Tower Case w/300W Power Supply ($67.98 @ Newegg)
Optical Drive: Lite-On iHOS104-06 Blu-Ray/DVD/CD Drive ($34.98 @ Newegg)
Total: $1227.84
(Prices include shipping, taxes, and discounts when available.)
(Generated by PCPartPicker 2013-01-30 07:45 EST-0500)

this honestly is good enough to be BOTH your primary gaming machine and fits in your $1200 budget.

My recommendation would be stay away from the steam box, its small form factor means it's going to made with mobile parts, meaning that you won't get maximum performance per dollar out of the steam box when compared to a desktop of your given price range.

So i would stick with a new desktop, I'm a bit confused with your budget rages, I could recommend something if you explain those to me a bit more.

I apologize I didn't fully think out my post before I posted.

I have two budget ranges because I was trying to decide between having a smaller less powerful PC in the living room, or buying a full on desktop. I wouldn't need that much money for a HTPC with a gfx card in the living room, but I'd be willing to splurge on a new desktop.

A new full on desktop would be used for gaming, photo editing (most just post processing), video editing (go pro footage), and general browsing/surfing/media.

Being able to compile/publish photos videos is a plus but as long as the machine can do it in a reasonable amount of time. the i7 3820qm doesn't pretty good job of crunching video/photos as is. It's just been occurring to me lately that as versatile as the laptop is, a desktop might suit me better in the long run.

I'll point out my $1227 machine has an i5 ready to overclock (i7 is a waste of money), two GTX 670s, 128 GB SSD, 1 TB HDD, and a blu-ray player.

It's good enough to be your primary gamer, AND your tv box.

Thanks for digging up a really good system spec, I'm still researching everything. My desk for gaming and the living room are on different sides on the house, so I was looking at putting a smaller box in the living room for just the purpose of doing steam 'big picture' while still having a monster rig in my other room.

A bluray drive for $34? Sweet. I mistakenly gave away two blu-ray players so this should suffice....

If you still are set on having a 'steam' box, i suggest using your Alienware. Why get another small form pc when the alienware will blow them all away? Thats my logic anyway. Use the extra money and you can build an amazing desktop. This is a way overkill rig but you sound like you like eyefinity so here goes -

PCPartPicker part list: http://pcpartpicker.com/p/ARRS
Price breakdown by merchant: http://pcpartpicker.com/p/ARRS/by_merchant/
Benchmarks: http://pcpartpicker.com/p/ARRS/benchmarks/

CPU: Intel Core i5-3570K 3.4GHz Quad-Core Processor ($189.99 @ Microcenter)
CPU Cooler: Corsair H100i 77.0 CFM Liquid CPU Cooler ($99.99 @ Newegg)
Motherboard: ASRock Z77 Extreme4 ATX LGA1155 Motherboard ($129.99 @ Microcenter)
Memory: G.Skill Ripjaws Series 8GB (2 x 4GB) DDR3-1600 Memory ($47.99 @ Newegg)
Storage: Crucial M4 256GB 2.5" Solid State Disk ($189.99 @ Newegg)
Storage: Seagate Barracuda 1TB 3.5" 7200RPM Internal Hard Drive ($73.49 @ Outlet PC)
Video Card: Sapphire Radeon HD 7970 GHz Edition 3GB Video Card (2-Way CrossFire) ($424.98 @ Newegg)
Video Card: Sapphire Radeon HD 7970 GHz Edition 3GB Video Card (2-Way CrossFire) ($424.98 @ Newegg)
Case: Corsair 600T ATX Mid Tower Case ($133.56 @ Mac Connection)
Power Supply: SeaSonic X Series 850W 80 PLUS Gold Certified ATX12V / EPS12V Power Supply ($149.99 @ Newegg)
Optical Drive: LG UH12NS29 Blu-Ray Reader, DVD/CD Writer ($49.98 @ Outlet PC)
Monitor: Asus VH236H 23.0" Monitor ($158.98 @ Newegg)
Monitor: Asus VH236H 23.0" Monitor ($158.98 @ Newegg)
Monitor: Asus VH236H 23.0" Monitor ($158.98 @ Newegg)
Operating System: Microsoft Windows 7 Home Premium SP1 (OEM) (64-bit) ($89.98 @ Outlet PC)
Total: $2481.85
(Prices include shipping, taxes, and discounts when available.)
(Generated by PCPartPicker 2013-02-01 14:54 EST-0500)

@camohanna: I was starting to go that route with using the alienware in the living room or giving it to my wife instead buying her a mac. Thank you for the build, I've been taking everyones recommendations and doing research on all the parts. The three monitors aren't really needed, I have three ACER monitors already I was looking into upgrading those a little later with slightly better panels.

I started another thread about building this awesome rig in the New Build section, I wasn't sure if this was a forum faux-pas or not, as I didn't really get this thread off properly with what I wanted from the system.

Yeah, wasnt sure if you already had the moniters hah. Please put the link up at the top for everyone.

They are actually giving $50 off right now for the muddaboard at Microcenter.

But I think at this budget...it doesn't matter.