Gabe is no dummy
He has hired the people needed to make this a firm reality. He understands what TYPE of hardware *REALLY* needs to be in a boxen to run his games well. You are kidding yourself if you think otherwise. BTW, the code is portable enough that he could even use one of the up-coming 64bit ARM chips if he really wanted to, and it would be more than performant enough given that he and his teams will have full control over the optimization of the game code and the driver / utilities. I am not saying it will not be x86_64, just that it no longer has to be. Linux supports more than just x86.
Audio wise, if Gabe really wants that to happen for his console it will happen. Period. Once again, he has full control and the engineering teams to handle the job.
Will it be the most Uber ZOMG boxen Evahz!!!! No. It will be more than good enough. I will postulate it will likely be somewhat upgradable, but with Steam approved gear. Another thing many of you perhaps missed is that Nvidia has both graphics and SoC's. Think about that for a minute, then go dig for info about what nvidia has been up to in regards to their fab partner.