John:
You have plenty of speed for an HTPC. The two big determining factors with respect to quality are going to be the video card and the DVD software that takes advantage of it. The consensus is that the ATI Radeon video cards have the best quality for DVD. I use a Radeon card that cost a whopping 77 bucks with the software that comes with it. Picture quality is fantastic--it matches or exceeds a $20k+ Faroudja processor.
To add to Roberts post, the type of DVD software used also makes a huge difference. Right now, Immersive's TheaterTek player is considered to be at the top for picture and sound quality, followed by Ravisent's CinePlayer. PowerDVD 4XP and WinDVD are a toss-up between one another. WinDVD has a little better PQ, while PowerDVD tends to have better audio.
I use TheaterTek - It's the most AV'ish software out there, and really blends in nicely with a HT.
For more info, check out the HTPC section over at the AVS forum www.avsforum.com
-Ryan Dinan
One critical thing that no one has mentioned yet is that for a PC to become an HTPC it cannot have onboard video and audio (built-in into the motherboard). A lot of the recent computers are like that. You have to have an AGP graphics port for the proper type of video card for HTPC use. Also, onboard audio can be disabled, but in many cases it causes problems when trying to install another sound card on a PCI slot.
My PC was ideal for this. All I had to do was swap the video and sound cards, buy a couple of software programs and I was set. This is what I paid at first:
Radeon LE video card: $70
Soundblaster Live Value sound card: $50 (later replaced with an Audiophile 24/96 for $150).
TheaterTek DVD Player: $70
Powerstrip 3.0: $30
So for $220 I turned my PC into an HTPC that gives me better DVD performance than a $20,000 Faroudja scaler. How's that for value?