The cards that are compatable are cards that include both a Tv tuner and a Mpeg2 encoder.
The TV Tuner part is just the part that allows you to select frequencies, just like what is used in your TV or radio itself. For instance in order for a TV to have a picture-in-picture feature has to have two tuners.
Now to understand why MCE requires a mpeg2 encoder you have to understand how PVR works.
A PVR works like this:
signal from cable ---> tuner selects frequency and turns it into something the computer can understand ---> the media stream is encoded into a digital format such as mpeg2 ---> the media is recorded onto harddrive ---> video player program reads the media off of the harddrive and decodes the digital format ---> you watch "live" TV.
That's how it does the time shifting and all that. Your reading the file off of the harddrive just like any other media file and you can go backwards and forwards and skip over stuff just like any other video file.
Other PVR software like Mythtv supports using software encoding of format in addition to using hardware encoding cards. For Mythtv you can use software mpeg4 and mjpeg formats for tuner cards that do not have a mpeg2 encoder included with them. The major disavantage of this is that it requires massive amounts of CPU effort to accomplish.
The file must be simultaniously encoded and decoded at the same time. That and the quality of image isn't that great, since mpeg4 and mjpeg are designed to be fast and make small files while Mpeg2 is designed for high quality images. Mpeg2 is what is used on DVD's and digital cable, for instance.
(note that you don't confuse digital with HDTV. HDTV can be either analog or digital.)
However MCE only supports mpeg2 hardware encoders because it's less likely to cause quality issues and makes things easier, even if it's a bit more expensive.
A example of a card that includes both tv tuners and a mpeg2 hardware encoder is the
hauppage WinPVR-350 (and 250)
A example of a card that only sports a Tv Tuner is
this guy
Notice the price difference.
I personally use 2 cards in my Mythtv setup. A WinPVR-250 and a ATI Wonder VE (note that All-in-Wonder tv/video cards use completely different chipsets, then just the plain tv card) The price difference is worth it.
The only exception that I know of for MCE is that ATI provides special drivers or add-ons that fake hardware encoding in software, but I'd avoid using that.
The WinPVR stuff includes a remote, btw.
Check out MCE's website for more infromation:
http://www.microsoft.com/windo...partners/hardware.mspx
(ps I prefer Mythtv over MCE, but it requires some Linux expertese to run, but it's free and more flexible/capable)