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#11
Another option would be to use WDTV Live media player (a small hardware box, looks like a compact USB HDD from Western Digital with a remote control) with a couple of usb HDDs (upto 2TB) containing all the media (mp3s, movies, avi, mkv, mp4 etc, photos like JPGs etc...) connected to a HDTV by a HDMI cable. You will get full HD video with DTS passthrough, and an option to connect a Dolby 5.1 surround home theatre to get the best of everything.
There is a lot of difference in watching the movies on a HDTV in 1080i rather than watching movies on a computer.
I have been using this setup for the last two years (minus 5.1 surround home theatre) and very happy with the performance. You throw any file at WDTV and it plays without a hiccup.... One of the best media player in the market.