2 drives would be best, but what MS has done is that Vista & W7 have pretty bullet-proof recovery. In the event of no boot, stick the W7 setup disk in, boot it up, select recovery when asked. It should do it things auto.
If all I'm planning to do is use this as a DVR do you think I'd be better off just finding a cheap dual core system and possibly popping in a video card? Seems like there are couple places where they can be had for around $300.
It's a nice looking case/PSU combo and the price is right but I'd be worried about what kind of quality you'd be getting with the Rosewill PSU. For your usage, you could save money on the CPU and go for something like this:
The first one will work for you with the 380W PSU if you stick with the on-board graphics on the mobo which is again all you'd need to Media Center/DVR. Those parts you have don't use much power and a dual-core with the IGP on that mobo is going to be plenty for Media Center/DVR. Even if later you add more tuners or something like a HD 5670 or HD 5450 card you'd still be fine.
Would I need 4 GB of RAM or would 2 suffice? I'll be running Windows Media Center in Windows 7.
Now - for cases. I'd prefer a mini tower that I could set beside my entertainment center rather than an HTPC that looks more like a stereo component. I'm worried about heat and my entertainment center is enclosed. Any suggestions?
I'll be adding the Avermedia Duet for a tuner, but don't see myself adding anything else to this set up so I'm not concerned about room. I'd like to have space for at least two hard drives.