I'd really like to get a MediaCenter system going. I played with MediaCenter 2005 a few years ago and was impressed with their user interface compared to Tivo. The use of graphics is much better than Tivo.
MediaCenter interests me as a possible replacement for Tivo because:
1) No monthly subscription
2) Slicker graphical interface than Tivo
3) With the My Movies add-in, I can archive my DVD collection to hard disk and have my entire library available via my remote (with that nice graphic interface - DVD covers displayed next to each movie) and you can search your library by Actor, Director, Genre, etc. See http://www.mymovies.dk/
4) More extensible (hacks available) unlike the Tivo HD products which are no longer hackable
For hardware, I decided on the HP Slimline's because I like the size. I bought the Slimline s3500f at Fry's
I had already used DVD ShrinkIt 3.2 to begin archiving my DVD library to ISO files. My Movies can play both mpg files and ISO's. The big advantage of ISO's is that My Movies reads it just like a DVD with the menu and all DVD options whereas mpg files are going to give you the movie only.
Two problems became apparent with the Slimline as a MediaCenter server:
1) Noise - The Slimline fans our too noisy in a home entertainment center
2) Noise - The BluRay DVD is really loud when the head seeks
How about MediaCenter Extenders
An alternative would be to put the Slimline in another room and use an Xbox 360 as a MediaCenter extender. The problem with this is the limited codec support in the MediaCenter extenders (including the Xbox 360). Limited codecs for me, means the DVD library would have to be mpg based - no DVD menus and much longer times to encode the DVD's to mpg instead of copying to iso's.
With the right hardware, MediaCenter might be worth pursuing, but I'm already having to give up a local BluRay drive and my DVD library and I haven't yet tried to deal with CableCard to get the full Tivo-like features in HD.
I'm throwing in the towel on MediaCenter.