Game Room would be better if they let you stick XBLA games in there, it would be especially awesome with the cabinets for games like Outrun and Virtual On. It would just be a more advanced way of looking at someone's gamerscore / what games they've played. Also a cool way to show off your virtual collection.
The interface sucks too, should have let us walk around with our avatars.
That sounds like an awesome idea...seems like they totally missed the boat on that.