The biggest problem of course with moving to digital is how are you going to get the videos or music to where you want them to be. I’ve really fought with this problem literally for over a decade now (yes in 1995 I had a computer hooked up to a stereo and a TV).
The last incarnation I was using was a first generation Mac Mini. The problem was that the streaming wasn’t fast enough for the Mac Mini (ironically every other computer in the house streamed just fine). So I would have to copy video files over to the computer manually to get completely stutter free playback. I dealt though until just a couple months ago.
In November I purchased my first original X-Box (yes I’m behind the times). I had always wanted to run XBOX Media Center on it, but didn’t want to go through the soldering effort to put a mod chip in, or track down esoteric software with the action replay kit to soft mod it. I did manage to find instructions on how to mod the x-box and install XBMC with things I already had, such as a computer and screw drivers. The most frightening thing about it was hot swapping a live IDE hard drive. Years of tech work has told me this is a no-no, but I did it anyway and it worked.
I even went out and purchased a remote control for the X-Box and can now browse from the couch. I went back and forth on whether to get a wireless controller or the remote, I settled on the remote because it was cheaper and more intuitive for anyone other then myself.
For MP3 playback we sometimes use the X-Box installation, but more then likely we are either using ipods, our N810’s, or the whole main floor audio we have going. In the basement we have a computer working as an MP3 jukebox. Off of this machine there is 3 different sets of speakers (one is the main stereo system) – that can cover the whole first floor of the house in zoned audio. Each room has it’s own volume control and it works fairly well. In the next year I will more then likely start running the cables upstairs to work on whole house audio.