Quite a few people have game consoles hooked up to their home theater systems. It is particularly beneficial as consoles offer more and more support for surround sound (Dolby 5.1) and widescreen video. The XBox360 and PS3 will only make this more true. I'm a bit behind the times on my console gaming, so the fact that I have a Dreamcast hooked up to my 990 is probably not a very useful data point.
It sounds like your basement should work well for a home theater, and I've heard good things about Athena's speakers. At 8 ohms and with reasonable efficiencies, a receiver like the upcoming Model 1070 should handle them fine, but the 990/7125 combo (at a little more than twice the price of the 1070) would give you all the power the speakers should need as well as the flexibility of separates. It's hard to say which would be the better choice, since it depends not only on your budget but on the 1070 itself (which, while apparently getting very close to hitting the market, is still something of an unknown).