We have two Xboxes in our house. The second Xbox is upstairs, and has been used mainly as a Windows Media Extender and as a way to watch Netflix and Hulu content. We haven't used it to play games because it was too much of a pain to either recover our Gamertags or copy the profile and saved games to a USB thumb stick.
With the new Dashboard update, Microsoft added two features that help with users with multiple Xboxes.
Microsoft renamed "recovering" profiles to "downloading" profiles. With this you can "download" a profile on multiple consoles, with specifying the live.com password. This allows you to use the same Xbox Live account on multiple consoles (though not at the same time.) With this functionality, I am able to play a game on the upstairs Xbox while my wife or kids are watching something else on the downstairs TV.