In an interesting turn of events I've now got an xbox360 working as my media center :)

Spring for the MiniMac, basic system, you will enjoy it more so than an AppleTV. I just got mine up and running on a 37'' with the bluetooh keyboard and mouse, run Front Row (Don't Install iTunes 7.2, stick with 7.11). Runs like a charm, and can browse the internet, run programs, etc. Has the Optical Audio Out, can use the DVI Video output, etc. Just have to upgrade the ram and I will be good.

That was plan C, I had asked a Mac fan and he advised against it.

I've now got my Xbox setup as a media center, and have to say that I am very impressed. For $399 (minus some nice discounts) I've got a decent DVD player with media center. Works like a charm.

I don't see myself buying a lot of movies from iTunes or bothering to rip DVDs to have some media server.

But what would be cool is if I could play my iPhoto slide shows in 1080p. That means a future iteration, if it survives long enough for their to be future designs.

Does it play .AVI format among others?

I'm thinking maybe a cheap PC networked to my main downloading PC would be a better thing.

It seems to play everything except for mpeg4 content at the moment. The xbox itself has the mp4 codecs, but the Vista team hasn't upgraded media center to allow it to stream...

I'm actually finding the interface more usable than the AppleTV and MCE has the added advantage of being able to expand with new features (I've already added an RSS reader).