Besides atom and celeron, there's also the new AMD Fusion (Zacate) options (link). The CPU is a little bit faster than atom, but the graphics are much better than the ion setups.
Another option to consider is a Celeron SU2300 setup. More powerful CPU than Zacate or Atom, but still very low power. There isn't much of a selection though. Only one board on newegg (link)
And then there's the new i3 Sandy Bridge processors. Pair one up with an H67 motherboard and you'll have quite a little powerhouse.
The above options are for a DIY build-it-yourself kind of setup. You may also want to consider a barebones HTPC like the Zotac Zbox. Here's one that includes everything, except the OS: Zotac ZBOX-AD03BR-PLUS-U
ASRock also sells similar mini-HTPC barebones systems (link).
Thanks guys! I had narrowed it down to the Zotac with the Celeron SU2300 Ion set up. Then I found a video review online about a new Zotac with the AMD and Radeon 6310, similar to the set up twpritchett just recommended. I think I'm going to get the barebones system since I won't need the hard drive, memory, OS or the Blu-Ray.
Thanks for confirming that the Celeron was better than the Atom. If I can't find the Zotac AMD soon then I'll end up with the Zotac Celeron for sure.
I am very excited to get this project rolling!