I've got a E-350 HTPC. The only shortcoming I've come across is it can't play HD netflix (yet). MS silverlight does not support hardware acceleration yet and the CPU is too slow to play it smoothly without help.
As long as the media you are playing is HA compliant, the E-350 doesn't have any problems. Blu-ray, mkv, etc is not a problem.
BTW, check out my E-350 build in my signature.