Who knows what they have in mind, but I really think Nvidia should design some kind of game console OS pairing ARM, Linux, x86, and Nvidia together for the best of all worlds. Integrate a ARM co-processor on there GPU's that can run ARM based apps and offload certain tasks and uses standard x86 cpu for normal apps with a custom slim and optimized Nvidia GPU accelerated Linux OS.
Nvidia is a diverse and innovative company so it'll be interesting to see what this Linux thing means and turns into, but here's hoping for the best they certainly have good clout with game developers anyway.