Hooking up a Raspberry Pi to a TV is by no means difficult. If you want to take it a step further, however, Raspberry Pi forum user mmathieu shows us how to stuff the Pi inside the monitor itself.
The Raspberry Pi is mounted on the inside of the monitor, and then the HDMI and DVI ports are soldered on. From there, the Pi is also powered by the monitor itself. Finally, mmathieu also cut a small slot so the SD card can be swapped out. It's not an easy project, but the end result is a incredibly cheap Raspberry Pi smart TV. It would probably be perfect with XBMC installed. Head over to the Raspberry Pi forums to see how he did it.