Hi there! You have a little bit of a challenge on your hands. As nice as it is having a designated space for your TV is creates problems if that layout doesn't work for you and your lifestyle. I suggest maybe an interesting freestanding piece of furniture that will house all your components but the furniture its self is stylish. or you could go built in but have some contrast between other elements in the room. Go with a dark stain or reclaimed wood, it will bring a little warmth to your room and be a little more interesting than having everything a shade of beige. There are a few examples below. Hope that helps.

a killer painter or large TV would be great depending on whats across from it. Love that space.

I like a built-in but what if it was some sort of bar are and the V went above the fireplace. But these are details that need to be determined after you have done your layout of furniture.

I would like to see you make it into a cabinet with shutter doors that you can accordian out of the way when your TV isn't in use. Think something like a closet with louvered doors. Inside shelves and a spot for the TV, XBox, DVD and cable box and speakers. I found a picture of what I'm talking about but it's too small to see. It's a houzz picture. Look under Popcorn, please: