Let me take a stab at some of these.
I own a little computer parts store and myself and one of my geeks are going to put together an ultimate media player. What we want to do is the following.
First is to have a dual operating system to run Linux or like Linux MCE to run on one video output and have Windows (Don't like MS products, But, you all know why). First is this possible to do? We will be using a Zotac ITX motherboard with a 2.2 dual processor or better. Memory is not an issue either, can run to to 8 Gigs. This will be so that the user can just switch from the VGA input on the Television to HDMI and on the VGA setting it will output Windows, and on the HDMI it will output Linux MCE.
Honestly, if you own a computer parts store you shouldn't need to ask us this. More to the point, even if it's possible (I'm not sure) you don't want to do this. Host OS affecting client OS performance, trying to pass through video using a virtual video card to the host, etc. It sounds like you want to show a comparison - use two identical systems.
Second will it be possible to set up Linux MCE to record TV in HiDef and what is the best Video card to use for this?
Yes and no. Depends on the source. HDHomeRun is your best bet, but it requires your cable provider to send unencrypted digital HD programming. Beyond that, try some searching here. In the future it may be possible to use the Hauppauge HD-PVR, but that has a number of limitations - search.
Third is that we want to use x10 products for security, home automation, etc... The reason for X10 is cost, it is easy to get and we will be able to sell it to apartment dwellers. Will Linux MCE support this?
Again, a small bit of searching will answer this. Short version - yes, long version - x10 comes with mixed results. Z-Wave or Insteon is a better choice, but search search search.
Also, if it will not is it possible to disable it in Linux MCE so we can run it on the Windows side?
Forth- Can Linux MCE play all types of video formats? I am guessing yes, but I don't know this.
I don't believe there is a player in existence that can play ALL types of video formats. LMCE is very complete though, and should be able to play any video you need.
Fifth- We will be installing a VNC app so the user can access their computer (network) from anywhere in the world.
Has anyone tried this, now these computers may be running other apps like Tivo server etc... also, it may be required to be recording video input and Television at the same time. This is so users may view and record from their home security camera, while recording television at the same time.
Now I am looking for answers and suggestions on what everyone thinks. If it can be done, and later set up to record 2 channels at the same time, it will be more valuable.
Out of the scope of LMCE. I see no reason why you can't VNC in, but I suspect you will not be able to view video. Most likely you'll see an empty blue box where the video would be. No clue on sound either, but don't count on it, the sound will likely be coming out on the box you vnc into if at all.
We are trying to squeeze this in the smallest box possible and have considered 2 motherboards etc... But we think with a little help we can shove it all into one box.
We are not trying to reinvent the wheel here, we are just looking to build a home server that will do it it all in one box.
Please if you have any suggestions, or questions, please contact me at: Me@rhonie.com
Instead of trying to squeeze it all into one box, build or buy a pair of small computers. Of course since you claim to own a computer parts store you should have the expertise to figure this out on your own.
In all honesty, your post makes you sound like a high school kid with a website or e-bay store, and no clue what you are doing. I'm trying to be helpful, not rude, but you seriously need to re-think this plan. Not only do you appear to have only a basic hobbyist knowledge of all of this, you haven't bothered to look into LMCE beyond the demo video. The first thing a competent business owner would do is look to see if it's even legal to sell hardware with LMCE: http://wiki.linuxmce.org/index.php/License