Build/buy a computer for television: DVR, DVD, high-def, etc.

[Josem]

there are a few threads on media center (centre?) PCs in recent months, so it may be worthwhile to browse through that.

depending on the resolution, even relatively low end stuff should be able to do what you want - eg, i watch standard-def video on a P4 machine with a GeForce Ti 4200 (!) graphics card and get great results.

[Freakin]

I just built one (without PVR functions). It's pretty sweet.

Also, x264 pwns xvid.