I love it on my HTPC. There are a few things that make Windows 7 better for HTPC use for me:
1. I think the new taskbar and the Vista-style Start Menu is much more space efficient, and I find it quicker and easier to find and launch applications. (I really, really like the new taskbar.)
2. Aero Snap, Peek, and Shake (and all the new window management tools on Windows 7) are very useful on a HTPC.
3. Say it with me.... Resolution Independent Font Scaling.
4. If you game on your HTPC at all, we are finally getting to the point where many games are making use of DirectX 10 quality improvements. I expect DX11 adoption to be far superior to that of DX10 due to the loss of the Vista stigma and better end-user uptake of Windows 7.
5. Memory. If you go with Win7, definitely go with the x64 version. The ability to have more than 3.5GB of RAM (in real-world practice) is very nice, especially with the price of RAM now (though act quick if you need DDR2, it is starting to skyrocket).
6. The Magnifier utility is vastly improved.
7. The Control Panel is vastly improved (even over Vista).
8. Driver problems have largely been sorted out. Windows 7 uses the same driver model as Vista. If it works for Vista then it will almost certainly work on Windows 7 (and anything that isn't working for Vista now, is never going to be updated).
9. Most of the performance problems of Vista have really, honestly been addressed. While Windows 7 isn't quite the unbelievable speed champ it was in the first Beta, it is still essentially on par with Windows XP. The only performance delta I even notice at all anymore is a very slight network file copy performance slowdown (though this is still better even than a fully patched and up-to-date Vista). However, I'm extremely sensitive to this (I'm a big network storage user, with very large files), and Windows 7 is perfectly fine. This is the single largest issue I always have had with Vista (and still do on my Work PC).
10. This is a bit silly, and something I always frowned about in Vista reviews and whatnot, but.... It really does look slicker. The transparent "glass" effects are just nice, and not over the top at all. The Slideshow Wallpaper is awesome! I love pointing it at a hand-picked selection of my own best pictures. A great way to display your own nice pictures to visitors and family!
The one HTPC-centric thing that I'm not in-love with is the new sound model. I'm undecided currently. Supposedly the playback path is much "cleaner" and it certainly has more features. I'm just not sure I like the new application independent volume control. It may really be that I just haven't learned to use it yet though. I'm still playing with it. If it works like I think it should, then it would be way better than XP. So far I haven't gotten it there yet though...