How will this supposed Xbox/PC hybrid next gen device even work? Will it have a toggle somewhere where it can quickly switch between full on desktop Windows and the regular Xbox console UI?

What about piracy?
What about stores like Steam?

If Xbox has access to incredibly popular PC games like CS and League, I think they might actually be able to pull something off here. If they can make these PC games run on their Xbox properly, I think they might actually be able to challenge Sony again.