I have been using my sister's old Dell desktop running Ubuntu as my media center PC. I'd like to upgrade to something that can handle HD and blu-ray. For this, I assume I need a newer/faster machine with a DVI or HDMI-out port.

I looked on Newegg at their barebones mini systems, some of which have DVI out. What do y'all think of these?

http://www.newegg.com/Store/SubCateg...rebone-Systems

The CPU doesn't have to be too powerful to do what you are doing, providing it can offload the graphics processing power to a GPU. You can use your current PC. You can get a pretty good HMDI-out HDCP-compliant video card for <$100 which will put out 1080p (1920 x 1080) and 7.1 LPCM sound (Sapphire Ultimate 4670 is also fanless for lower noise). Some can put out HDMI (from DVI) with an optional dongle. As for playing BD and HD-DVD, you can get the LG (Lucky Goldstar) combo drive (plays HD-DVD and BD, writes/reads DVD) for $100-150 depending on whether it can write BD or not. Comes with software.

Asus has the EEE Box, which soon will have a dual core version. The old version worked well as a HTPC, but could sometimes stumble on 1080P output, the new one will not have that problem. Seems to fit all your specs for under $300 and can be mounted to th eback of your monitor.

I love my Shuttle X27D barebones kit. It is a dual-core Atom system. You can get them for $175 at central computer right now. With 2Gb RAM and 80gb hard drive, you're talking $250 before OS (add $50 if you want a DVD burner in there). Has VGA and DVI out, plus multi-channel audio out. VERY quiet. I can't hear it at all from more then 3' away.

Edited to add:

I got started with the X27D because we make a web appliance based off them. In the original hardware selection phase we were going to build our own, but some of the small form factor cases had such crappy power supplies we had many early problems. In that search, I notice the Jetway HBJC200C91 has the exact same case I tried on the first model (actually, many of the Jetways on that page appear to use that same case). The power supply failed in less than 48 hours. I really felt it was crappy quality compared to the Shuttle, and we ended up paying a premium for the Shuttle before the price came down.

Can that Shuttle unit play 1080p video? It seems like it might be a little under-powered for it.

Edit: I'd even settle for 720p.

That's a fair question. My four year old37" set is only 720p and it works fine. 1080p is a substantial amount more pixels though. My thinking, though: I've got a blu-ray player for 1080p. For netflix, youtube, etc - 720p is going to be just fine.

Lenovo recently announced some interesting looking devices

http://www.ehomeupgrade.com/2009/08/...e-pc-products/

That Q700 looks cool. Probably better than the X27D for 1080p

1080p video files are very rare - I have a media center box with a couple of 1080p clips, but I rarely play them, other than to show the thing off.

Aim for something that'll do 720p and Bluray/HDDVD decoding. The important things you'll need are a video card with HDCP and a decent Bluray player. Sadly, the software players out there that'll do hddvd AND Bluray are old, so if you want something recent, you'll need BD only. Not that that is a problem - BD drives are dropping towards the $50 range, making them extremely cheap,and most hddvds are finally sold out everywhere.