Windows MCE is mostly for playback of various forms of media with a slick, user interface instead of having to fun programs and commands. Think of the difference between playing a DVD on your computer and a DVD in your player - which one can your wife do?
Windows MCE at its core is simply Windows XP SP2 with some extra media integration. In fact, I read somewhere that a good portion of new machines being sold all had MCE on them. So it can do all the things a normal PC can do like play games, surf, whatever but also comes with a meda GUI. And it can do TIVO functions with proper hardware. I use mine simply for playback. The requirements to record and timeshift HD are pretty steep and I use DirecTV so I would still need an external decoder box. I find it easier to just BitTorrent the TV shows I want. The hardware you talk about should be just fine but the requirements are much higher for a PC-based solution than a standalone. My Tbird 2600 and 512mb of ram will sometimes hiccup or drop frames if I have a couple other things going on in the background, a process that a $50 DVD player can handle with ease. This is because it has hardware dedicated chips whereas the PC is mostly generalized. A good video card with hardware MPEG-2 decoding is a definite must. -- Brian
