Firstly Welcome to the forums
Ok, ive never done a pc and motherboard and a xbox in one but i have thought about it and its slightly complicated when you look at how you want to give the xbox power, or how you are going to mount the dvd drive but in actual fact its nothing you can't do. Its just something that will take time and research on how stuff works for me anyway
I have however on the older 360s wired a 4 pin molex to it and used a 203w power supply instead of a 175w so I got to use a pump, about 3 fans and some lights and stuff on it without a hefty pc powersupply.
See if theres a way of using the pc power supply for the xbox as well maybe? Im not sure.
Another thing you need to take into consideration is the way you want video to be outputted on the system? I.e either having a switcher to one monitor or having two outputs to your lcd (hdmi and vga) just depends on ur setup.
Watercooling the xbox is no differant to any other chip you watercool, I would get some ram type square heatsinks to place on a few chips to help the heat dissapation though.
I want to do this myself but I just cba any more. Lol