I'm comfortable in Linux, but was planning to go with 1004. How compelling is the improvement in equipment options for 1204 relative to the liklihood of a lot of fixes?
I'm in Colorado, USA.
We've been shipping Dianemo on Ubuntu 12.04LTS Desktop pretty much since Canonical released it and I can say without hesitation that I would recommend going with a 12.04LTS based installation. You can test your proposed hardware for 12.04LTS compatibility simply by testing if it boots from a Ubuntu 12.04LTS Desktop USB stick or LiveCD (Core & Media Directors). If they boot and you get a desktop and a network connection your pretty much good to go.
The hardware you choose for your Core will be largely dependent on how many rooms you will equip with MD's and how much media you will be streaming concurrently. The more MD's you have the more load you will place on your Core when everything boots (hopefully this is not something you will be doing everyday) and when you are streaming video to several rooms at once.
Another factor to consider, if you are going with traditional MD's, is where will they be located? Will they be located local to the TV's or will they be located in your central equipment rack? Any surround Amplifiers or other audio amplifers will either need to be located with the MD's centrally (with long speaker grade cable run to each room) or with the MD's locally in the rooms they serve. Either is ok...but in-room means you will need more well ventilated cupboard space in the room (but will have shorted speaker cables etc). In Dianemo we still support MD's but 95% of our installations now use upnp media players, SmartTV's or AppleTV's instead and we use small IP based controls to provide discrete control of devices in and around the house (something in the past we would have done via the ports on an MD). We're also, like LMCE, moving to a new style Orbiter which does not require UI regens ever - UI regens historically have always caused a lot of overhead on the Core's of larger installations in particular. Moving away from MD's and modern Orbiters all add up to requiring less powerful Core's that use far less energy than they did just a few years back.
Best of luck with your house & your installation.
All the best