To be more accurate,
LinuxMCE is based upon PlutoHome. This is a system that was designed to be a "smart home" system, unifying all aspects of lighting, media, climate, security, and telecom functions throughout a house into a single, well-integrated system.
In the media section of things, it not only stores and catalogues your media, it also controls your audio and video gear (TV, Cable Boxes, etc) and manages them. The end result? no more 50,000 remotes on the couch, everything falls under a single control, which can be distributed to many different forms of control throughout the house, each type of control able to access all of the functions inside the house.
This may seem like a lot to process, but the demo video shows a lot of this functionality, and a lot of the functionality is explained on the wiki. Trust me, there's a lot more.