Is the 4200 good enough for an HTPC build?

Tom's has an article that may be of interest to you.

http://www.tomshardware.com/reviews/avivo-purevideo-cle...

Here's a quote from the conclusion:

"...I can say without hesitation that if you choose the 780G/790GX/785G, GeForce 9300/9400, or Intel G45 IGPs for home-theater use, then you won't be disappointed.

On a final note, I would be remiss to avoid pointing out that any motherboard with a PCIe slot can be transformed into an HTPC powerhouse with the addition of an inexpensive discrete graphics card like the Radeon HD 4650. If you're looking for more than just HD video playback (the occasional game at 720p, perhaps) then the discrete route is well worth the extra money spent."

I think the HD 4200 IGP will get the job done nicely, right up through Blu-Ray decode.
If you did want a discrete GPU take a good look at the HD 4350. You can get a passive cooling silent model for around $25 after rebate ASUS EAH4350 SILENT Radeon HD 4350

The good thing about the HD 4200 IGP is you can do your build and road test it.
And then you can decide if you need more GPU power and add one in at a later date.

The HD4200 will decode BRs just fine with one caveat - they won't do anything other than Dolby Digital or DTS for sound. If you have a high(er)-end stereo and want DTS-MA or TrueHD (which 99% of BRs have) then you'll want the cheapest 5xxx card you can get. If you're just going to pipe it directly to your TV or to a 5.1 stereo (via HDMI) then the HD4200 is perfect for that. Heck, even the 3200 works fine.

Thanks! It looks like the 4200 is what i'll be sticking with, as im just connecting via HDMI cable. And if i do ever need to upgrade a 5450 or 5570 will do great.

Oh just one more question since this thread is already made:
Should i stick with the Athlon II x3 2.9Ghz OEM version for 69.99 USD, or save money and go with the Athlon II x2 2.8Ghz OEM for 52.99 USD?
And the reason im buying the OEM's is because of the slightly lower price and because i already have an extra AM3 cooler.

Plus is a 350W PSU enough for the CPU and the 4200?

350W is more than the system will need. Expect it will be under 200W during full load and quite a bit less during video playback.
It will also allow adding in a future low end video card or extra hard disk drives.

For the HTPC tasks you listed the Athlon II x2 240 looks to be a good match.

Oh ok good ^  

But im stuck again. Would i get better picture and sound quality with a 5450 and 770 mobo or a 785g with a 4200? I don't have any surround sound for this particular set up, just the tv's speakers.

I looked up the audio chipsets on a couple Gigabyte motherboards. It's not much to go on but the 785G has a newer edition.
785G GIGABYTE GA-MA785GM-US2H = Realtek ALC889A
770 GIGABYTE GA-MA770-UD3 = Realtek ALC888
If you're at the point where you're looking for a better audio experience you're probably going to want to think about a discrete sound card and better speakers. Between sound card and speakers I've been told quality speakers make more of a difference.
Since you're just working with the TV's speakers I'd suggest staying with the onboard sound and see if you're happy with the result. Adding a sound card and speakers later will always be an option.

THG review of HD 5450 Advantages: Support for Eyefinity triple monitor setups and ability to bitstream Dolby TrueHD and DTS-HD Master Audio. And DX11.

One point about the audio - if you're using HDMI, it doesn't matter what soundcard is on the motherboard since the audio goes through the video card, NOT the onboard sound. IF you see a point in the future where you'd want to drop $400 or more on a nice stereo system with DTS-MA and TrueHD, then go with any cheapo AMD board (760, 770, 780, 785 - whatever) and get a 5450. If that's not in your plans and you just want to go through your TV speakers, then go with a 785G and the BR decoding is slightly better on the HD4200 (785G) than it is on the HD3100 (760), HD3200 (780G) or HD3300 (790). Again, the onboard sound makes no difference if you're using HDMI as it's not used.

My old HTPC that I just replaced two months ago was a 785G board an an Phenom II X2 550 unlocked to 4 cores and it worked great - it just drew FAR too much power (240W AT IDLE) and it didn't do DTS-MA/TrueHD. Oh, and it was way overpowered for HTPC usage so I upgraded to the i3 530 and an H55 setup. Power draw now is only 80W idle and 140W and I have my high-end sound. The old HTPC case was just obnoxiously loud, too, so I figured I'd just start over.

You'll be happy with an X2 setup.