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you can always rip the DVD and convert it to something like h.264 or xvid at higher bit rate to save some space. I used to use the Media Center interface, cuz its nicer and can be accessed with remote, but i ended up being lazy to set stuff up and just use a wireless kb and mouse and play videos using kmplayer.
For me, I always buy a nice looking HTPC case, silent ATI video card with HDMI (2400 or higher) CPU, depending on which one u are using, most of mine aren't very fast, so a passive heatsink will do the job. IF you are really concern about noise, the ideal thing to do is use a SSD for the windows install and network stream the movies from a NAS.
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