I agree that in a perfect world, all PC?s would be silent. But noise bothers some people more than others. Why not put your current PC where you would place your HTPC for a couple of days and see if you get used to the noise or if it is too irritating to bear. I?ve got a system that is basically a HTPC, and it?s not quite. In fact, I had to put two more fans in the case for my Athlon XP 1800+ just to boot when I bought it. Yes, it?s noisy, but I comprimise?I use the ear canal earphones that came with my Sandisk Sansa MP3 player to cancel external sound when I?m by myself, and turn the volume up a little louder when the whole family is watching a movie. When several people are talking, it?s a lot more distracting than the hum of the computer case anyway, so I would have to raise the volume of my receiver regardless. My ?other? HTPC is my laptop which I use in combination with my Infocus X1 projector. Laptops are definitely a quite (but not cheap) alternative. There are lots of TV via USB 2 options available these days too. With the stringent video requirements for Windows Vista, I would expect the coming generation of laptops with dual core processors to be adequate gaming machines. The $6 games you mentioned are probably a couple of years old and therefore are not as likely to be demanding on systems. Some people have to play at high res, but I played Doom3, Halflife 2, Warcraft 3 etc. flawlessly on my Althon XP 1800 +9600 ATI AIW combo, albiet fewer bells and whistles (e.g. anti aliasing, high res etc.) I still was fully emersed in the games and enjoyed them.
My Athlon is a pretty hot processor. It can?t even overclock 5% without freezing, but I donated to a software called CPUIdle which let?s my CPU basically gear down like a Pentium M does when I?m not doing something demanding. I leave my Athlon system on 24/7 since it?s the server for my other four systems. (I?m in my mid 30s, so I?ve accumulated a lot of computer systems over the years that I still try to find used for. My six year old daughter uses one running Windows 3.1 just for the paint and word processing programs).
So what are the specs for your current system? Why not download some HD samples from windows showcase to see if you system can handle them? If not playing back HD, you?re system is probably fine. Maybe all you need is a VIVO card?
I admit that I?ve never used MCE, but I don?t see why I would need to. There is lots of free software for playing back all kinds of video, codecs are free to download, and Windows Media player comes with ever windows anyway for managing audio and video. Maybe all you need is connectivity between your PC and TV. From what I can tell, that?s basically what MCE is, plus a remote. An AIW card takes care of all that. Nvidia and other companies have similar solutions too. Research, research, research and you?ll make an informed decision.
In terms of building a budget gaming rig, find out the recommended specs for an upcoming game that you?re dying to play and aim for that. Beyond that is just guessing which usually equates to ?spending too much now?. Let early adopters of technology with fat wallets buy the cutting edge components so they can bring the price down for those of us more budget conscious people. I?ve been buying/using systems since the Commodore Vic 20, and if there?s one thing I know for sure, computers and accessories will always get cheaper/faster/more/better.
In short, my recommendation is to use your existing system (for now) as your HTPC (if the noise doesn't drive you crazy) with minimum investment in the upgrade, and build your budget gamer with the cash you would have spent on a machine that you may not even use much one you built it (since it would have been a dedicated HTPC.