I have a long To Do List that I keep on my computer desktop next to a Things To Buy List. Not that I have much free time To Do or money To Buy with, but a guy can still dream.
One of the things that falls on both lists is the desire to install (the To Do part) a functioning home media PC or Home Theatre PC (which is obviously the To Buy part).
There are several routes you can go, and all of them require a certain amount of hardware, software and cabling. The payoff is a machine that will quietly and efficiently stream videos, music, online radio, video games and even live television to your television and throughout your house using devices like the Slingbox. You can use media PCs to record television, to back up your movie collections, to watch Internet videos on YouTube, and more.
The first thing you'll need is some kind of a PC. If you're an Apple person you could do worse than picking up an Apple TV box, which are selling for just $260 these days. They're convenient and affordable and you can use them to rent and buy content and link to more content on your computer. You can also use iTunes to handle most of your video and music, but in general Apple TV is a lot more limited than other machines out there.
If it has to be Apple then you might want to consider hooking a Mac Mini to your television or monitor. Basically this is a compact computer available for $599 that can do everything a computer can, as well as stand-in as a media hub with up to 500 GB of storage. It can connect to the Internet wirelessly which means fewer wires to trip over, there's a DVD player and you can connect to two screens simultaneously - albeit with no HDMI port.
Ultimately all of the Apple options are limited in some way, (e.g. no HDMI on Mini, no Blu-ray players, no native support for many formats and codecs), which is why most home theatre PC's are based on Microsoft or Linux. You can get more out of Apple by downloading Plex (www.plexapp.com) but nothing is going to replace the missing hardware.
If you go the Microsoft/Linux route you can repurpose pretty much any tower out there as a media centre, providing you have the right video and audio card installed.
Some companies like Zotac (www.zotacusa.com) make purpose-built mini PCs that are phenomenal home media centres in that they are quiet and powerful and can be customized to the hilt. But pretty much any respectable computer will do.