Thanks to the magic of YouTube, some of the people lucky enough to receive one of the 300 beta Steam Machines have been able to share their impressions of the system. The OS looks like exactly like Steam's Big Picture Mode, with the option to switch over to a Linux desktop. Most of the videos report the controller being very lightweight, but this is probably due to it being a prototype that was made on a 3D printer.
There are videos available of people playing Metro Last Light, Portal, and Team Fortress 2. The graphics look really good, and one thing I noticed that was interesting is that the graphics settings have been simplified in Metro to one slider for overall quality.