Yes, I just set mine up last night. I would highly recommend a wired configuration. I don't have the new xbox with the built-in wireless, so I can't offer an opinion on its performance. I tried recording some shows and streaming them to my PS3, which only has a G card in it, but the HD streams were just too much for it and stuttered constantly. If you want to run more than one xbox simultaneously as an extender; then a wired infrastructure is pretty much mandatory.
To answer your other question, the Xbox will only function as a Media Center Extender. Therefore, any shows you set up to record will be recorded on the tuner equipped PC. The Xbox merely provides a method of interacting with the host PC.
I know there are several methods to remove commercials from the recordings, but I have not confirmed whether the xbox will understand these modified files. When I set that up tonight, I'll report back.
Here's my setup so far:
Windows 7 Ultimate x64 ->(wired)-> Asus RT-N16 150Mb/s Router ->(Wired)->xbox360 & PS3.
Asus RT-N16 wireless to two laptops. (which seem to handle HD streaming of recorded shows just fine).
My Ceton 4xHD cable card tuner adapter records 4 HD streams simultaneously on 2TB of attached storage. Streaming HD to my Xbox only uses about 12% of the 100Mb/s wired bandwidth. Based off of this, I don't see any reason why up to 4 xboxes can't be used as extenders at the same time with the possibility of two more over wireless-n (but would require more tuners on the host pc).