What should happen is that when your Media Director is announced to the Core, it should first boot to the configuration wizard,... the "Sarah," wizard... If the Core has diskless boot images created and ready.
First, make sure that PXE boot is working... that the machine is getting a DHCP IP address assignment from the Core... You'll see text messages about no image being present... and the machine might time out and boot its native OS...
Before you boot into LinuxMCE on the MD, first you might need to run the script to generate a MD instance on the Core...
I think it's;
sudo /usr/pluto/bin/Diskless_CreateTBZ.sh
... from a terminal on the Core... if memory serves,...
Reboot the MD, again with PXE boot...
Once done,... the Core will serve up a copy of a generic diskless boot image that will take you to the Wizard... From there it should be relatively easy to get a working system, barring hardware issues (video resolution, sound, etc.).
PS: make sure the create script runs through completely before rebooting the media director.