I’m a pretty big fan of Windows Media Center. In fact, it’s at the heart of my home theater system. Just one wrinkle: I can’t play MKV files from within the WMC interface.
In case you’re not familiar with it, MKV is a video-file format like Divx and MPEG-4. In fact, it’s a format you’re likely to encounter if you routinely download videos via BitTorrent.