This morning Valve teased the upcoming SteamOS, which sounds like a custom Linux distro designed for lightweight computers running in the living room. Valve says they've "achieved significant performance increases in graphics processing" with SteamOS, and are working to optimize other subsystems that impact game performance, like input latency and audio performance. However, those tweaks will only benefit the few hundred Linux-native titles that are currently available on Steam.
To play your PC and Mac-compatible games, a SteamOS box will also serve as a streaming client. An appropriately-configured Mac or PC will be able to pipe compatible games across the network into your living room. Valve also plans to add typical set-top box functionality, like video and music apps, and expanding the recently announced Family Sharing setup to include per-user achievements and SteamCloud saves and family-friendly settings to prevent kid's from being able to access inappropriate titles.
SteamOS will be available for download "soon". It will be free for end users and licensable for system vendors.