I think he was refering to the state of AMD's Linux drivers, AMD's hardware is without doubt amongst the best, but yeah their drivers on Linux aren't great. On Windows they in my experience work just as well as nVidia's drivers.
I know, but I have two points:
1) On Linux, every quirk someone gets with the Catalyst is seen as evidence for the bad quality of the drivers. If quirks appear with NVidia's blobs, it's seen as single and particular cases - the overall quality isn't questioned.
2) Assuming NVidias driver quality really was that much better on Linux, what's it good for? For everyday, non-3D usage, Intel's open-source driver outclasses both blobs. And for 3D-demanding stuff (like Games) it won't help if case such as Tomb Raider appears.
I've been gaming for around two decades and following AMD (or ATI) and Nvidia since I ATI rage 128 and Riva TNT (before that I wasn't aware of what hardware I got) and both companies sometimes just suck. Mostly I (try to) ignore the tendency of the Linux users to see everything either black or white (good/bad, savior/villain, you name it), but gaming goes beyond the Linux world's nose.
So right now, it's hard to tell whether Valve will go with NVidia or AMD. The only point I can see from here is, that AMD already delivers the hw for PS4 and the next XBox, so they may offer further hardware off the shelf for Valve. I think, everything else is just wild speculation and/or fanboyism. The gaming scene still is (in general) very childish and pubertal, but even they managed to get over this (mostly).
Intel APUs rock the world with opensource driver!
If I were Valve, I would definetily go Intel, no exceptions!
If it only was about the driver (quality), I'm with you, but I'm afraid they won't be able to compete with PS4 and the next XBox then. Intel GPUs still ain't too powerful and they still didn't reach OpenGL 4.x.
1) Valve may want to have FLOSS driver.
Access to gpu driver source code is good when you maintain hardware on it. But I can hardly see Nvidia/AMD happily sharing their binary blobs source code with each and every game dev.
With FLOSS Intel/AMD drivers problem go away.
2) Valve may want to demand quality for volumes it can provide.
Valve can sell lots of GPU's, just that mean that GPU vendors will be more than usual willing to provide a bit more resources for GPU driver development.
For Intel that mean FLOSS driver, for AMD its choosing (though Valve right now favor binary blob..).
So not everything is lost!
Plus we do not know what performance will next Intel GPU's offer. Maybe they will be enought for Valve plans? (Especially if they want to introduce shorter live cycle for "consoles").
I would like it to have an AMD GPU just for the sake that it would push AMD to make better linux drivers, but otherwise it SHOULD use Nvidia hands down. I like both companies about equally - I don't like nvidia's price point or attitude, but when they release a new architecture, they really go all-out on making sure it's a good product. They do tend to take the cheap way out more often than AMD when it comes to new series (such as the 9000 or gtx400 series).
As for CPU, both AMD or Intel are good enough. So far it seems most Linux games will barely push a modern dual core to it's limits. Considering intel doesn't really have anything mid range that doesn't include an IGP (an IGP is just a waste of hardware), I think one of the quad core AMD piledrivers ought to be good enough.
I also feel 8GB of RAM is overkill, 4GB ought to be plenty (again, for the Linux games available now). I think PS4 and Xbox720 having 8GB is ridiculously overkill since consoles can be micro-optimized to be more memory efficient, however, I'm sure both sony and MS used such a high number so it never becomes a problem. With RAM being so cheap these days, why not.
#1 Intel/Nvidia combo. This is probably the best solution for a Linux setup, but is also very expensive. If the Steam box is to be successful it must be cheap.
#2 All Intel setup. Intel has good support for Linux, and they have a CPU+GPU combo, it's just that their GPU isn't as good as Nvidia's. It would make the setup cheap enough, but not powerful enough.
#3 All AMD setup. The CPU performance is going to be fine, but driver support for AMD graphics have always been behind. Though lately Open source drivers haven't been bad, but don't compare to Nvidia's drivers.
Honestly, kinda hoping for an AMD APU setup, for two reason:
1) APU's use unified memroy, and it could be GDDR5 (fast!) like PS4 both for graphics and physics, etc. The potential of 6+ Gb for textures is a very real possibility with that setup, and gives developers a lot of freedom. There's also a lot of fine-tuned optimizations games can make use of there, like direct register passing from the CPUs to the GPU, and vise-versa (great for OpenCL-style GPU calculations).
2) I've been using Catalyst on Linux for over a year now, and while Nvidia generally seems to be better supported and doesn't have as many quirks, my 7850 runs things about as fast as my Windows boot. In full-screen (undirected) mode, there's virtually not difference between Catalyst on Windows and Linux (all the quirks are Mutter or Compiz specific it seems). Moreover, having AMD on SteamBox would give them a much needed commercial incentive to maintain better drivers for Linux in general.
It also needs to be said that SteamBox should attempt to be competitive with PS4 and Xbox Next in terms of hardware and price. Both PS4 & Xbox Next are rumored to include extra (ARM based) "systems chip" for on-the-fly video encoding/decoding and running the internal OS. I think SteamBox will most likely not have those bits to keep the price competitive (since Sony and Microsoft will surely subsidize their products).