I recently spent a lot of time using two different in-flight entertainment systems: one on Eva Air, and another on Virgin Atlantic. For people who haven't flown recently, I should explain that these systems consist of a touch-sensitive TV monitor combined with a remote-control-sized controller. The systems typically offer music, TV, movies, flight status, and video games.
I believe both systems were based on Linux. I saw the Eva system crash and reboot, and the Virgin Air system has a number of Linux freeware games.
The GUI frameworks were pretty weak -- both systems made poor use of the touch screen and had obvious graphical polish issues. The Virgin system was much higher resolution, and was 16:9 aspect ratio. I expect it was running on slightly higher-spec hardware.
Both systems worked pretty well for playing music and watching TV or movies. The media controls were pretty limited - neither system allowed seeking to a particular point in a movie, or even reliably fast forwarding. Both systems provided enough media to entertain your average customer for the duration of the flight.
One cool feature of the EVA system was backwards compatibility mode with the older "channel" music system from the 70's. The controller came with the traditional "channel" UI. If you used the channel buttons, the system simply acted like the old system, cycling through a limited number of preset channels. One nice difference from the old channel system is that these new virtual channels always started when you switched to them, rather than having to join the looping presentation at whatever point it happened to be in.
The game portions of both sysetems were very weak. None of the games were very good. Perhaps the best game was a port of the shareware Doom game on the Virgin Atlantic system. (I used an in-flight entertainment system on Singapore Air many years ago that had Nintendo games. It was more fun.)
The Virgin system allowed you to order food and drink, which was nice. Both systems had credit card swipers, and offered some for-pay options. Both systems allowed you to make in-flight phone calls. EVA allowed you to send SMS messages and emails.
Both systems allowed you to create "play lists" of music tracks that would then be played while you did other tasks. I enjoyed this, but I suspect it's not used much, as anyone with the sophistication and interest to use this UI would probably have their own MP3 player.
The Virgin system had two other very nice features: 1) laptop power in most seats (although only two plugs for every three seats), and 2) Ethernet connections. Unfortunately the ethernet connections were not yet active.
Virgin allowed you to "chat" between seats. I didn't try this, but it seems like it would be fun for some situations (e.g. when a high school class takes a trip.) I expect that the Doom game can play between seats as well, but didn't investigate.
Virgin also had normal mini stereo headphone plugs, which I think was a good idea. Eva had two kinds of audio plug, but neither one was the normal mini stereo plug. I tried using "Skull candy" noise-canceling headphones with the Virgin system, and while they helped suppress the airplane noise, they didn't eliminate it completely.
It will be interesting to see how these systems evolve over time. I think that once in-plane internet access becomes practical people will prefer to surf the Internet to using most of the other services. (besides movie watching) And with the in-seat power, I think many people will prefer using their own laptop to the in-seat system. On the other hand, the in-seat system is very space efficient. There's a chance people will use it as a remote display for their own laptop or mobile phone, which could then remain tucked away in the carry-on luggage.