Thanks for your advice Desslock - it worked for the most part.
Bassfisher6522 - The issue i don't think is just the machine's specs itself. I am running a single core processor Intel Xeon , but its is over 3 Ghz, and the system memory is 3 GB. I do use a dedicated graphics card, a ATI Radeon 4350 HD. I had a friend that had similar specs running Windows 7 but the processor is a Core 2 Duo running at 2.6 Ghz, similar graphics card, and same amount of RAM. The same thing happened that the media center makes it hard to try to do other tasks on the pc when the media center is running (like the mouse keeps jumping screens while i try to, for example, surf the web). The performance is not the issue, its the fact that it seems media center wants to take primary control. so whenever i minimize my web browser, it immediately jumps back to the MC.
On my personal laptop, with Intel Extreme 2-64 MB shared w/ 1 GB of DDR 333 memory, 1.5 Ghz Pentium M 1MB L2 cache, S-Video out to my TV, can do both (w. Windows 7 Media Centre), but again the media center makes it hard to jump from the secondary display to primary. Also once i am able to surf the web it will frequently jump back to media center. I think judging from all 3 machines, i think Media Center will take over the computer no matter what since it is fully integrated into the OS rather than the add-on for XP-MCE. With the latter of the two, i found that it didnt give me headaches jumping back between screens and doing things on my PC while the MC is running.
For my personal laptop however, i did not use a PC Tuner card since it did not come with one (6 yr old laptop). I played a video file and then tried to jump screen to go to Firefox browser. the pointer kept jumping screens and the pointer would get "trapped" on that secondary monitor. Thanks for your advice, but i did check out the hardware and compared with another computer. I appreciate the help and thoughts!