Well I've been lurking since the /. post so I figured it's about time I posted.
This is exactly why I got my IA-1 and it works great for this. I use it as an X-terminal in my living room and have even mastered resting it on my gut so I can surf while reclining on the couch :)
I just use the Rasmus jailbait 2 (Still have to get around to 3 but if it works why mess with it?).
When the system comes up I start X and an rxvt. I then issue an 'xhost + MY.Server.IP' and 'telnet MY.Server.IP'.
Once I'm logged into my server I do a 'DISPLAY=My.IA-1.IP' and 'export DISPLAY' (may vary depending on your shell) and then run rxvt from my server.
I then minimize the rxvt running on the IA-1 and start mozilla from the server. It works great. Yeah one of these days I need to get around to making it more automated and easier to use but since it's just for my personal use I don't mind it.
Something else that may help - I started reading it but never had time to fully digest it. JWZ (of Mozilla fame most recently) recently whipped up some stuff for running x-terminals in the nightclub he just bought. Here's the link: http://www.dnalounge.com/backstage/src/kiosk/
Looks like he's got a lot of the same goals many of us have for our systems so there's probably some good stuff there to go from. I just don't have the time for it right now.