I recently visited Microsoft and was fascinated to learn that their vision of the Media Center goes way beyond buying a PC to stick in an entertain center cabinet. Instead, they envision all manner of devices embedding media center technology.
With their 2005 release of Media Center, last Christmas, Microsoft created the idea of a Media Center Extender. The idea was that you would own a single media center PC, and be able to interact with it from TV's all over the house. Same thing TiVo is attempting with some of their Series2 features. But currently, to get this functionality, you have to buy (frankly, too large) a $250 set-top box that plugs into your TV on one hand and your network on the other. Granted, it detects everything automatically (if you're on the same subnet), and just works for the most part, but it's overpriced and unnecessarily big.
Microsoft wants to fix that. (They as much as admitted to me that they got the current extender out the door just to have somthing in the field -- no shock, really!) They are currently working with TV manufactures to embed the media center directly in the TV (the same thing DVR companies are trying to do). They're also working on a few home "appliances" that would have it, like a little screen for your kitchen that would just be a screen, speakers and a network jack, and would extend your media world into your kitchen (as many of us want to do).
But the most interesting one for me was the XBox 360. Your current XBox can be transformed into a media center extender, with the purchase of an add-on pack that costs $60 on buy.com. Here's a how-to reference as well. So, if you think about it... Why buy a MCX set-top box for $250, when you can get an XBox + MCX kit for $210, and also have an XBox. Same thing will be true with the next release of the XBox (when coupled with the next update to the Windows XP Media Center operating system)... The XBox 2 will *be* a media center extender, with full-animation 100% integration to your media center.
So, get ready for just about everything to have a network jack in it AND to be able to play your MP3's and downloaded TV shows. Wonder where they'll put the view screen on the toaster?
BTW, if you purchased your Media PC before Christmas 2004, then you have to contact your PC's manufacturer -- not Microsoft -- to get an upgrade to 2005, so that you can support extenders. And they'll probably make you pay for it. But you should do so, because their 2006 release -- which plays happy with the XBox 2, as I mentioned above -- will be a free download from microsoft.com.
See http://www.microsoft.com/mediacenter for more info, and you might want to check out this press release.