<< I doubt it will make Divx files look better >>
Of course it will. Have you seen MPEG files on a GOOD TV yet using the H+? MUCH better than VGA. I DON'T mean using it to watch MPEGs on the monitor (It'll be washed-out and rescaled)
<< The necessary CPU & video card with HQ TVO cost less than Xcard and will have no compatability issues >>
Have you SEEN a Hollywood+ in action? The difference between its MPEG-OUT is like night and day when compared to any VGA conversion! Using TV-OUT can not be seen in any way as a replacement for a Hollywood+. Also, I thought their card is considered the standard for PC-DVD compatability? I've had more compatability-related playback problems w/ ATI players... I geuss that means that using TV-OUT DOESN'T eliminate compatability issues (Though you could always try multiple players and one is bound to work). I think it is because my card is defective, but after upgrading to XP, very few MPEGs will work in the player, even some that used to work before (Perhaps they're corrupted and Media Player doesn't care). If it is NT/XP-related, perhaps it is the NT/XP compatability that is what is giving it a bad name for compatability (Though all my DVDs still work)...