So, some friends of mine have been discussing the concept of an open source gaming console. I’m starting to do the research into the idea and see if its viable. To begin these are the requirements:
1. It must be open source, wherein anyone can develop for it and develop attachments and software and such
2. It must be a console system, wherein it hooks to a TV or projector and has interchangeable discs or cartridges that contain different games and have controller units attached to it
3. It must be able to connect to the internet to allow for multi-user games, software updates and purchasing of new games
4. It must allow for the user to upgrade the hardware, ie RAM updates or adding additional memory
Those are my main requirements. I’d also be willing to work on a hand-held, but what I really want is the next generation of Wii/Xbox/PS etc. Only…open source. What this would hopefully allow for is a cheap console system that would be easy for developers to develop for and would offer cheap games and various methods of acquiring games for the end user. Neat, huh?
Its Dangerous To Go Alone, Take This 
What you described is a PC. You can get video cards with TV out options and there are plenty of USB controllers out there. To get this off the ground you would need an OS that makes it seem more like a consol and packaged components. The simplest way would be to specify a bundle of hardware that people can buy from NewEgg or somewhere and then have a disk to install the OS from. This would allow people to choose if they wanted the consol to be wireless or use an ethernet jack, as well as specifying things like RAM and harddrive space for themselves.
What I’m looking to do, though, is make it less a computer and more a small console. Something that people who don’t understand computers can take and plug into the red/yellow/white jacks on their tv. Yes, the PC can do alot of what I want. But it also has a lot of problems that I’m looking to fix. For example, PCs are very very laggy, even when playing games with no internet connection required. But consoles don’t tend to be.
Another thing I thought of is that while I want people to be able to add more RAM and more memory, I don’t want things like the video card, sound card and CPU changing so that the OS is just handling one set of standard hardware. This makes it much easier to develop for.
In looking back at this, this isn’t something that I have heard of anyone else trying or certainly not succeeding at but it doesn’t mean it’s not possible. I think it’s a great idea! If you’re really interested in doing this, I would say just set up a web site. Other people could get very excited about this too. I would start by spreading the idea around to some smaller gaming sites or podcasts to start generating some interest slowly, once you have something together of course. By something I would say that you come up with a general spec range but I would make the OS the primary initial concern. In this way you could have something ready to load and run if people wanted to initially build it for themselves. The physical manufacturing seems like it would be the hardest thing to get going small. I don’t know of any small companies that produce custom parts but it’s something to look into. I know there was a project out there at one point to make an open source video card but I’m not sure what came of it. If you start with the OS, this would also allow the option for people to make a virtual machine on their PC with the correct simulated hardware and that would get the ‘system’ out there and in use for developers of various sizes to get interested.
As far as your list, I would say you should likely use USB as the connection as you want to build from small up and your own custom connection would be a huge barrier to get started. I would say that same for disk versus cartridge; go with a disk because it would be something people can create and use easily at this point. Allowing for memory and RAM upgrades would be something you would have to worry about in the physical design stage but wouldn’t be an issue if you started with the OS.
Just my thoughts in looking back at this. I really do like the concept though.