OK. After doing a bit of "running" around the forums, I was finally able to generate successfully my first MD. My MD is running on a Zotac IONITX-A-U Atom N330 board. Nothing extra. I can play video but the quality is sub-par, to say the least. AVIs come in fine, but the mkv files are terrible. Choppy, sound cutting out... Un-watchable.
What should I try next? Upgrade the video drivers on my MD?
I saw the very detailed installation explanation by thezfunk on:
http://forum.linuxmce.org/index.php?topic=8700.20;wap2 but did not go through the motions. The AV setup wizard completed and that is where I left it off.
I did not do anything extra on my MD other than apt-get update and apt-get dist-upgrade.
I know that the issue is not my network as I can stream mkvs to other PCs and my PCH box. I think that the Zotac is much more powerful compared to the PCH, and should easily be able to play MKVs.
By the way, my core is running on an AMD opteron 165 setup with 4GB ram and two 1 gig network cards (one on the board and the other PCI).
Please, any suggestions would be great!