I have a game that I am working on in a C# console application, purely as practice before going on to better methods. As opposed to using something such as a Windows Forms A
Also, the console isn't just for text processing. You can write pretty decent window managers for it. You can do anything with it. It's just harder.
It's slower, though. I implemented a virtual machine in C# using the console for the user interface. It doesn't print lines of text one after the other; it [the interface] acts rather like a GUI.
If you want mouse input on the console, try this hook: http://blogs.msdn.com/b/toub/archive/2006/05/03/589468.aspx?PageIndex=2#comments