RAM will not have any real impact on this, and 4GB is overkill. 1-2GB is plenty. For CPU I would suggest the highest end CPU you can afford!! If it can do 1080p then 1080i isn't an isue as it is half the work!
But realistically, I would strongly suggest you focus on waiting for VDPAU support. Only then are you going to be able to guarantee 1080p H.264 high bit rate decoding with reliability. Then you can use a very cheap CPU, even an Atom, as all the work will be done by the GPU.
Now the GPU in the board you are talking about is an integrated 7050PV, which in theory should be capable of using the VDPAU extensions (generally only 8xxx/9xxx series chips support this, but integrated GPUs with PV, supposedly are supported as well). However, the cheapest option that will give you full support under VDPAU, plus very low power and small footprints are any of the nVidia ION boards coming out. The Acer Revo is a complete system and very cheap, and there are other mobo-only solutions being talked about on the forums right now.
VDPAU support is not in LMCE yet, but it will be and probably before 0810 goes to release.