Are you guys interested in end-user (ie me) suggestions? I really doubt I'll have any time to actually help create UI updates, but as a user I have some ideas even if they may not be feasible. I can also create some rough drawings (sticking to the recommended sizes for buttons and such).
For example, adding to the rough sketch los put up and the pop-up/new menu screen discussion. Instead of a pop-up extending to the right from the item (media or whatever), have the item menu options (tv, audio, video, games, etc.) appear along the bottom of the screen or in a column on the right hand side. Additionally, if possible also shrink the current media just enough to fit inside the "frame" created by the menu and top/side pop-ups using the same design object as the video in the on screen remote in the current UI1 (I hope I'm using at least close to the correct terminology). To me this would give the slick gee-whiz factor so many people ask for while still maintaining the LMCE "media first" philosophy and retaining quick access to menu/submenu items.
Just off the top of my head while reading through the thread and I'm not sure how feasible it is, but I think it at least somewhat addresses all the "what about" questions.
edit: Looks like Krys had a similar idea as well. I'm slow about replying after I open a thread in a new tab.