@Istimsak
Gnome desktop and Window Manager, Eclipse Helios on screen with the BIRT reporting engine workspace opened, I use it to extract stats from some local intranet apps, no Java involved with it, just apache+php+mysql but I'm using the birt engine to do a lot of boring stuff, do you like it ?

I know you've source packages in Arch but what I was trying to say is that in Gentoo there're no options, you've ebuilds (binary packages) but most of the time you've to deal with source packages and it's not an option. Arch is built around the idea to install your OS within few hours with binary packages (with Gentoo you need at least two hours... and just for having a core system)

You didn't mention about your graphic card but probably if you want to display something on your LCD TV you'd better stay with DVI, VGA/HDMI/DVI output settings are "enabled by default" on most linux distro (even Ubuntu), SVideo output is generally disabled if you don't configure something from your XOrg video setup config

Try this:

http://www.mini-itx.com/

or just try to get an atom motherboard, I've got mine 1month ago for just 60€ from Amazon (free shipping !). If you don't need brute CPU power you'll probably be satisfied about them

IMHO here's the most important question:
- What kind of experience do you've ?

Can you tell us your skills or your knowledge ?
Touch screen is just a peripheral, there's no magic around it, if you want to get an app running within 3 month I suggest you to use it as a common input device, a touch screen is generally recognized as a mouse if you don't need to handle/deal gestures or these esoteric new technologies.
Are you able to create a web app for example ? in this case you may rethink your app and go ahead with your development with the tools you're familiar, your linux system may be ready in a moment, just install Xorg and a browser and you're ready to go.

Let me know if you need help on this
Hope it helps

Ben

I have to agree with Matthew about Windows knowledge and poor Linux job requests, if you want to promote yourself with just one (huge) Linux skill you may have some troubles (or at least that's what I'm experiencing now). Try to focus on a specific field (security, SOA, virtualization, ...) and get something more "cross-platform" you may find more opportunities if you're an IT guy.
Certifications are now becoming a must, if you wish to enter into the networking field (routers, switches, ...) then maybe a low level Cisco exam is appreciated, ITIL's are also well known if you're trying to get an employment in a big corporation

Hope it helps
Ben