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This is what I am hoping to acheive with LinuxMCE.  I have a pentium 2 with about 300mb of ram 32mb nvidia card with svideo and a sound blaster live card.  I would like to take that and hook it up to my tv and stream *.avi (xvid,divx) along with *.wmv,*.mkv and *.ogg files from another computer.  Can a pentium 2 handle this?  If so, this is how I understand this. Install Ubuntu Server 6.10 then install LinuxMCE from repos. Correct?

Hi, I may be able to help with one of your questions.

Internet dilemna - I have an adsl connection which currently I connect to through a usb modem.  The difficulty I am having is that this modem is not easy to get working under linux (speedtouch 330).  I have managed to get it working under ubuntu desktop but not server.  I would much rather use an ethernet modem due to the ease of setup aspect, but the problems with that are the mini-itx board I am looking at has 1 ethernet port (internal), and 2 pci slots - both of which I intend to use for other purposes, and also it drains a little more power and takes up another power socket.  How this relates to linuxmce - if i managed to get the usb modem working, would it be easy to configure the firewall etc to use a ppp connection as external instead of an ethernet connection?

Your layout should look like this. 

Cable/DSL Modem -> Wired Router -> 4/24 Port Switch -> All things in your house go to your switch.  Although I have almost no experience with DSL but from my understanding it should layout the same.  If not I am sorry I was not able to help.