If you want to hook a media center PC up in your living room and you don't want to mess around, might I recommend the Hannibal Deuce +. A beefy computer loaded up with geek-friendly Ubuntu Linux, it's an open source machine designed to play anything and everything you throw at it. It can also load itself up with (legal) videos by using built-in BitTorent support and load it up on the included 500GB hard drive. It even has included Rip and Burn support, letting you rip DVDs (that you own) right to the hard drive.
This thing is pretty awesome looking, and actually for what you get isn't too insanely priced: $900. It'll certainly be the centerpiece of your home theatre setup happily, and it looks to include enough bells and whistles to keep you occupied for some time.