hehe, with a good video card and a good TV-Tuner card with hardware MPEG2 encoding you could get by with an Athlon 700! Heck, a PIII 350 with a MPEG2 encoder card and separate MPEG2 decoder card could probably do what you want! But, in practicality you have to balance the cost of the other hardware and the price of the CPU depending on your budget. Heck, a PIII 350 with a MPEG2 encoder card and separate MPEG2 decoder card could probably do what you want!
It's always best to have hardware encoding, Hauppauge's WinDVR series has it, and yes those cards are expensive. But they take probably 90% of the recording load off the CPU and put it on the encoder chip.
The best home theaters are rack systems, I propose you consider a Micro ATX desktop style case that matches the style of typical home theater receivers. These are shorter and wider than "cubes", but even though they are "larger" the shorter height means they take up less space on a rack, and the much wider width more closely matches the 17-18" of the typical home theater audio rack system.
And there's the key: total system performance. You can get some NICE Micro ATX boards for the Athlon XP. Boards with the superior nForce2 chipset. Also, some Micro ATX desktops allow for full sized power supplies, while still being a little narrower than the typical HT audio receiver, and very short in height.
How much video power do you need? You COULD have a "do everything" media center that can play games well, simply by choosing the right video card. I like the 9600 Pro because it's powerfull yet very efficient, putting out very little heat.
The BEST settup would be to use a hardware-compression TV-tuner card, separate video card, and separate sound card. That's 3 slots, the Micro ATX form factor offers 4.
Back to the CPU, look at prices and consider them, the XP2500+ isn't expensive. When you get to a certain point you'll see prices increase faster than model numbers, make your decision based on finances.
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