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I checked out the videos, the XBMC forum and website and I will be definitely giving the program a try. The program looks like it will suit my needs pretty darn good. I think you have sold me on XBMC. I am still unsure about the hardware aspects of a HTPC though.
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Well, I use an Asrock myself with XBMC and it works great. Boots up in about 30 seconds. Plays all media I throw at it and outputs pretty good sound. The other nice thing about it is that the power consumption is quite reasonable. 25 - 30W on average. It's pretty quiet. The new bios allows you set how much the fan blows. I have it on silent and rarely hear it.
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It comes with a 320GB drive which wouldn't be enough to hold all my DVD's, music, pictures, TV shows etc. So I am assuming that I would host all the stuff on my main desktop computer and stream it to the ION-BD. Would this work smoothly? I am planning on buying a dual-band N router to handle the load and the distance from my computer to the HTPC isn't very far (but hard to a run a cable). Would this setup work? Or should I go with a custom setup like Mick has?
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This is where you and I differ. I have all of my media stored on a 4TB windows home server box. The Acer Aspire Easystore. That server is connected to the htpc through a lan. So, I can't comment on how well wireless would perform with larger movies. Although, I'm sure you can run a search and see how wireless N performs streaming various mkv bitrates. It *should* be able to stream an 8gb h.264 mkv. But wireless is funky, depends on where you are etc. I would recommend using a lan cable. I'm not even using 1000mbps lan and the streaming is totally fine.
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I see that he uses his to connect to his cable box. I'm not really interested in doing that as much as I am interested in using a HTPC as a media organizing device. Is there any advantage in building a custom HTPC and loading all my files onto the device itself versus streaming them from my computer? I can see it being more convenient to have all my all files on my one desktop computer, but is the performance much different?
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I don't record tv either I just download it so I wont be able to comment.
The one thing I will caution you with is that XBMC live is great and all but it is still a project in development meaning that it can crash and things can go wrong. You'll have to scour the forums to find help and you'll have to sometimes go into the guts of the linux command line to make fixes. Also, if you want to add new skins or plugins you'll likely have to ftp to the unit and upload them. I guess what I'm saying is that it isn't idiot proof, you need to know how to use computers in the event that things go wrong.