"A problem with LinuxMCE 1.0 was that the window manager in the Gnome desktop in Ubuntu does not support compositing and some of the other extensions needed to deliver a rich multi-media experience."
Compositing support in metacity is currently being integrated. I can fully understand that you didn't yet want to use that, but I don't understand why this is a reason to take KDE. GNOME allows you to use whichever window manager you want. Why not just use something like CompizFusion (http://www.opencompositing.org/, or in former times Beryl or Compiz?). And... what exactly are "other extensions needed to deliver a rich multi-media experience."?
"However, you cannot have two X sessions both using hardware acceleration, therefore LinuxMCE forced Ubuntu to use Vesa mode, and the integration was messy."
As already mentioned several times, this is simply a complete lie. I have used two servers, both with hardware OpenGL acceleration, several times before and I even did it a few minutes ago, just to confirm it's working. I don't know which hardware/drivers you're using, but I think it's most certain that they were causing this problem. Anyway, it works fine (NVIDIA-drivers version 1.0-9755).
Please understand that not everybody has enough money to buy a high-end media-center PC. Most media-center PCs will probably be old PCs with only a relatively low amount of memory. I know, KDE and GNOME, both configured well, use about the same amount of RAM. But there are other alternatives, like the already mentioned Xubuntu. A media-center PC is something most people won't use as a desktop, but only as media-center. So a big desktop environment like KDE or GNOME is simply a waste of time (They take longer to start than thinner environments) and ressources like CPU and RAM.
So please, explain to me why you chose Kubuntu/KDE. Or switch to something different.