And this is why I have yet to buy any version of Street Fighter for the 360, because Microsoft has yet to get its act together regarding wireless 3rd party peripherals. I'm not going back to wired controllers. Just not going to happen.
I actually tried this with my 360 (w/ Netflix and ESPN3) and OTA HDTV. It worked a'ight. Ended up watching less TV (probably a good thing) and saved a lot of cash. Then the NFL season started back up, and I paid DirecTV their blood money for Sunday Ticket.