I don't know what you all were doing, I had a similar problem.
I realized it was caused by, not using the right version. I had to be running 7.10 and use the 7.10 live cd. not version.x and a different version.y live cd.
I hope this sheds some light. 

Hello.
in responce to your question

BluRay
From what I gather there is no native support for this at the moment (due to some git adding over the top encryption to them) in LinuxMCE or in fact in Linux at all.  I did however notice some work that has been done with MakeMKV to be able to stream the decrypted file to other players, has anyone played with this yet? (http://themediaviking.com/software/bluray-linux/)

Yes I've tried it, It did work once for me, and I do emphasize once. I used the information found here

Code:

https://help.ubuntu.com/community/RestrictedFormats/BluRayAndHDDVD

maybe you'll have better luck. 

  OH, sorry, my apologies. I hope I didn't step on some one toes.

Could some one help me with the building from source guides, Ive tried many times and only succeeded in failure. Mostly because of file not found errors.. If one of you build from scratch vets can point me in the right direction. I would be very happy.

Thanks again for your time, and effort.

First I want to thank the creators for the awesomeness that LMCE is. I've just recently gotten in on LMCE and want to express my gratitude. In my short time using the system I've been very happy with what I've been able to get working.

Now the down side. Unfortunately the system was designed around a mid release. I'm sorry if this seams like a kick or a insult. I don't mean it to. I would like to propose that the next development of the LMCE be based around a Long term service release. My reasoning is after fighting with 7.10 to get it working on my newer hardware, I've had a lot of frustration due to: packages being unavailable, out dated, updates that I do get brake other packages. Furthermore updates in stuff like adobe flash(10.x)  will not work due to other packages unavailable and/or their dependencies being outdated. I just think if the next release would be focused on a LTS, then people would be able to contribute easier.

I've attempted to follow the guides for building form source.
http://wiki.linuxmce.org/index.php/Building_From_Source,
http://wiki.linuxmce.org/index.php/Building_From_Source_1.1,
http://wiki.linuxmce.org/index.php/Building_LinuxMCE_0804, and
http://wiki.linuxmce.org/index.php/Building_LinuxMCE_0810.
I must say it's a little confusing, not the concept but which guide to follow. May-be some one could post a "how to from a fresh/blank system", and a "how to form existing system" as separate guides. I'm not a n00b but I'm not an expert, I'd consider my self an advanced n00b, one who knows enough to get around and to be dangerous.

Thank you all again and I look forward to contributing.

I have a few questions about the repository's. I've tried several times to install LMCE on top of Hardy(8.04) and well I get nothing but pure frustration during the download process after I choose the mirror. in the command line I get nothing but url can not be found.

I know it's not my box, because I can update just fine and do, before I start the LMCE install.

If you all of you are willing please post what mirror your downloading your updates form, I live in the United states, so update servers form their are preferred.
Thanks