First I want to thank the posters on this thread for asking/answering most of the questions I had while building my system. I want to share my experiences as an example of success.
Shuttle XPC SN25P (up to 3 sata II HDs, 350W ps, PCIe 16x, 1 PCIe 1x, no PCI, 7.1 digital audio with optical in, optical/coax digital out )
Athlon 64 3000+
2x 512MB DDR 400 Corsair value ram
Samsung 250 GB SATA HD
Sapphire ATI X550 256MB PCIe with passive heatsink
PowerColor Theatre 550 Pro PCIe TV tuner(http://www.powercolor.com/product_series_Theater.html
Media Center 2005 Rollup 2
latest Catalyst drivers from ATI.
Powercinema that comes with the tv tuner for decoder
Bought most of the system from shoprbc.com (Ottawa)
At first I had the ATI All-In-Wonder X600 PRO because no PCI express TV tuner cards were on the market. The tv experience was absolute crap. It took a while for the channel to change and tv could get very very choppy. Thankfully a month ago PowerColor released the first dedicated PCIe tv tuner card. The Theater 550 tuner chipset from ATI is the best solution out there. Even the brand new All-In-Wonder X1800XT doesn't come close, TV wise. I found a canadian online store that carried PowerColor hardware (etccomputer.ca) and asked them to order the brand new PCIe card for me. I traded in my x600 for a fanless ATI X550 video card because it was pretty much the only one that fit inside my small case alongside the tuner. If you do go with a separated video card/tuner solution inside a Shuttle box, MAKE SURE THE VIDEO CARD FITS INSIDE! You can't get any card with a passive heatsink underneath or a card that takes up two slots (the lone PCIe slot is in the way)
I have a decent quality s-video cable from the illico HD box to the tuner along with a pair of L/R analog audio cables... I unfortunately don't know how to record any 5.1 digital audio with a tuner card. Dunno if it can be done; if so, please share! The computer is hooked into my DLP projector via a VGA cable and an optical cable runs from my optical out into my digital receiver.
I'm using the MS MCE remote control. The little red LED that flashes in front of the illico box's IR receiver doesn't always work so I put some tape over the area to block out ambient light. I programmed the remote to control the volume on my surround sound receiver and to turn it off. This means it replaces both the illico and receiver remotes. I still need another remote to turn off the projector.
It took a lot of work to get the right combination of components but now it works great. If only I could record/play digital sound... If you have any questions, post them!