The *nix ports to the Dreamcast might be stuck in text mode for the moment
(I do hope they continue to improve) but homebrew native Dreamcast
programming is quite well-suited for original games.

By native programming, I mean using homebrew gamer libraries to access the
hardware,  rather than putting a whole generic OS on it.  KOS, the only
Dreamcast gamer library worth mentioning, is quite advanced nowadays,
compared to a year ago.  Take a look at http://dcdev.allusion.net for more
info.

Nothing wrong with putting *nix on the Dreamcast (I do it to learn more
about the design and implementation of operating systems.) But if your
interests lean more towards making original games you can burn for your
friends, KOS has all you need:

multi-threading and semaphores API (a la QNX/Neutrino); PVR tile accelerator
API and OpenGL-like graphics API (use whichever one you prefer to do your
graphics); MP3, OggVorbis, S3M, and WAV playback APIs; CD sound playback
API; controller access API; serial port access; and even an experimental IP
stack.

As for using the Dreamcast as an embedded controller, I can't comment, since
I don't know your requirements.  But perhaps KOS might be enough for some of
your projects.  There is an unsupported OS mode with userland apps, and a
little windowing toolkit (not a GUI toolkit, but just a windowing toolkit.)

Porting games from *nix to KOS, though, is another can of worms altogether.
KOS is not a *nix clone, and doesn't even try to be POSIX-compliant.  It's a
rather usable library for "straight" hardware access to a gaming console,
period.

RC5Stint

PS - Let's not start a whole "what is KOS, elaborate please" thread.  This
is all I'm going to say about it.  I'm just pointing Christopher to
alternatives.  And perhaps there are other people out there that want to
develop for the Dreamcast and think they need to put *nix on it.  Now if you
REALLY want to put *nix and X on the Dreamcast, no matter what, then I'll
just STFU. ;-)

PPS - KOS GL is not OpenGL compatible.  The API just looks like OpenGL,
that's all.

PPS - Ok, I'll STFU now.