I've been going through the throes of building the "perfect" PVR/MP3 box. My "problem" is that I have a 55" HDTV. :0
Currently, I'm using a Dell Dimension 2350 P4 2.2GHz w/512 megs of PC2100. My PVR card is a $50 Creative Labs Digital VCR and I'm using a Mad Dog GeForce4 MX 440 PCI with S-Video out. I'm just using two-channel sound out directly to the TV.
Everything I've read says that the ATI AIW 8500DV card (or a the even better AIW 9000) is the one to get for PVR, and ATI sells a component video out box for $29 (plus $15 shipping!) so you can get up to 1080i resolution on a HDTV. This will be my next shot, but I'm waiting for the card price ($170ish) to come down.
The second problem I've had is heat. I bought the Dell 'cuz it was cheap, fast and quiet. The only downside to it is that it doesn't have an AGP slot, or it would be perfect for this particular setup (ATI only makes AGP cards, and I definitely want the better video quality of the component video).
Anyway, I have
this case from Newegg with a Biostar M7VIQ motherboard in it and an XP 1600+ that I was using before the Dell. In order to keep things even remotely cool, it's way too noisy. I got the case because it pretty much could pass as an A/V component on my rack.
So, I'm going to try a 1.5v Thoroughbred A 1700+ CPU and a Zalman heatsink and see how that works. If I can keep the temperature reasonable, I'll move back to this setup with the AIW 9000 and the Dell will go in another room. Oh, and I'm using a 160 gig WD 2 meg cache HDD with 3 partitions: 4 gigs for WinXP, 90 gigs for MP3s and the rest for PVR.
I had Dish Network's PVR receiver before, and the quality I'm getting from the equipment I have now is better than that was. I will grant you that the lack of a program guide is annoying, but since I have DirectTV, all I have to do is set a timer for the shows I want on the satellite box, and then just program the Creative PVR to start recording at those times. I understand ATI actually has a guide, but I don't see how that will make life any easier for me since I still have to have the satellite box programmed.
The main downside is that it's a bit more cumbersome using a PC as your PVR box. Once you get past the initial setup, I think it's the way to go. Especially if you're going to also serve up MP3s from it (I ripped all our CDs and put them on the drive, so anyone can listen to anything anywhere in the house/garage/deck). And there's no monthly fee for doing it this way.
Also, the machines just don't want to go into Standy/Hibernate on their own (which is annoying). I've gotten around that by changing the power button being pushed to put the machine in Standby (if anyone has a real solution, please LMK!).
Hope this helps!
Joe