After several countless hours. It finally started working! ( http://forum.linuxmce.org/index.php?topic=3272.0
I guess the best thing to do with linuxmce is to walk away and come back in a few hours, then everything will work!
One thing that for sure wont fix itself is when I click the new scenario button that was created with the set top box installation I cant record, rewind or FF. The best I can seem to find is its not going thru MythTV but only directly to Xine or something? I have looked all over the Admin Page for a way to enable recording and such on this input. Can someone give me a hint?