First I would like to say thank you for your expertise and help!
I am planning an Ivy Bridge based HTPC not quite sure if I will go I-5 or I -7 yet (need to find out how much hyper threading might help the software: XBMC + TMT5 or something else used as external player). I can't wait for the "Waldo" plugin (grabs source links form other plugins aiding in user created library of streaming files.
First priority is media playback quality of ALL media formats including .strm and .flv files.
So, any and all up conversion possible is paramount!
Yes, BD and 3D are expected as well.
No gaming is currently in the plans (I asked the wife if she wanted any gaming and hasn't gotten back to me yet/ I don't game), but we do have a PS3 that can always be used.
I am not confident that the Intel graphics will suffice for my up-scaling and playback expectations. If a GPU is needed like I am thinking, I want to go the Radeon rout.
Consider this a Videophile build.
We may be adding either a 55" Philips 1080p plasma or a projector set up to possible 108" for this project..... planning ahead and would like this build to hopefully be able to keep up with whatever new codecs and formats may arise.
For strictly media playback, you certainly don't need that powerful of a system. My HTPC (see specs in my signature) could do all (except maybe 3d) that you're asking. It would just be a matter of installing the proper codecs for whatever format you're looking to play.
If you're actually going to do conversion from one format to another (a discrete graphics card will handle up-conversion), then you would definitely want a more beefy system. I do conversions of this type on a separate system (again, see specs in my signature block). This allows me to keep my lower powered HTPC on 24/7 (for those late night recordings).