Thanks for you inputs. Here is what i did and have worked perfectly fine I have repeated this task many times to make sure it works always.
1) Download and install Kubuntu8.10 from http://mirrors.ccs.neu.edu/releases.ubuntu.com/kubuntu/8.10/kubuntu-8.10-desktop-i386.iso
2) After standard install upgrade packages through packge manager (I prefer that you can use apt-get)
4) Download from NVidia website latest driver and follow the instructions. The best way is Ctl+Alt+F1 and stop x11-common and you should be able to install NVidia drivers after install reboot
5) Download Alsa update script install and reboot.
At this stage you should get aplay -L displaying 3 subdivices which includes HDMI (Though despite of HDMI being shown as audio output I still haven't got success with Audio through HDMI)
6) Grab new installer from here http://deb.linuxmce.org/ubuntu/new-installer-alpha-latest.tar.gz
7) Follow new-installer instructions (pre-install / mce-install / post-install)
Note: Just copy /var/cache/apt/ as this is the pace where pre-install will download all the LinuxMCE binaries. This will just save you time incase if you want to repeat your install. But still do pre-install as it will download any files which are updated since your download
I have been able to put this to get a running LinuxMCE on my Asus M4N78-Pro mobo, Belkin N1 wireless
Now once i sort out my HDMI I am nearly 50% to what I want to achieve.
I am planning to put in this 4-port ethernet card http://www.routerboard.com/popup.php?kods=77&sess=bc66207ec765bb1620af214bf7b5a020
Searching for PCI or PCIe cable modem so that I can put that too into but can't find any for a decent price. After putting all this in and running Squid I should be able to have a complete gateway with media server plus home automation