Hi oozie,
It's a difficult one. I don't think you'll be able to get the office happening without an extra PC. Windows has the ability to give you remote desktop independent of the console (real) desktop, but you still need a PC to access that function.

I think you can still get PCs that are "dumb terminals" that could connect to the RD, but it's probably cheaper (& easier) to put together some low end parts.
If you want to watch a bit of TV on it, you'll need a tuner & MCE 2005 for that PC (there's some new software that allows your 2 MCEs to work out any scheduled recording conflicts so that they spread the recordings over the tuners in the 2 PCs) . If you just want to watch some recorded TV, then you can tweak up a Windows XP machine to do the job. I've got an XP machine with an Athlon XP 1700+, 512MB of RAM & a 5200 video card & I can watch SD recordings on it fine.
In regards to implementing an extended link to the main media PC (as you outlined), there are a number of products around that allow you to extend KVM functionality over cat 5 cable, but I can't see how you could get both to work at the same time.
Either way, I'd run at least double network cables between the office & the lounge just to cover all options.
Justin