So this is recommended for TV's up to 37" but it would fit my AV kit nicely (assuming you can take the back off it) and it would fit very nicely into the space available. I was thinking of using the MBM1000 bracket with it to mount a 42" TV. Is this a terrible idea?
The Reflect 800 with the MBM1000 bracket would be fine for a 42" TV. The only thing you will, need to consider is that the bracket does not just bolt to the top of the stand, it attaches to the back at the bottom as well so if you would need to remove the back panel to fit your equipment, you should know that the supports from the bracket will limit the depth, although slightly less than having the back panel in place.
The bracket is only down the centre so if you just need the space for connectors it may be OK?