Help me create an internet-based home media center

We just moved to Silicon Valley. Needless to say, everything here is %^&*#@$ expensive. Our only option for broadband internet at our rural mountain rental outside of Los Gatos was wireless via Surfnet Communications. It cost $350 just to install the hardware, and we’re paying $70/month for 2.4GHz 2MB max upload/download.

We decided to spend a little more on the internet connection and skip the satellite TV service altogether. Cable is not an option for us. We can still upgrade our speed one more notch to $90/month for 2.4 GHz 3MB max upload/download, if necessary, without having to upgrade to the 900MHz hardware.

Hardware immediately available:

HP Pavilion dv6000t running Vista Home Premium
MacBook Pro
Xbox
Sony Trinitron TV (I can’t remember if it has DVI or not, but it does of course have RCA jacks)
Sony tuner with Bose 5.1 Surround sound speakers

Short-term plan…

We’re going to buy a set of either S-video or DVI cables and try to just play directly from the laptops through the Trinitron/tuner.

Long-term plan…

I have no idea, but there are three primary options.

a) Mod the xbox into a Media Center
b) Buy an Apple TV and associated accessories
c) Buy an Xbox 360 and associated accessories
d) some combination of a and c

This Gizmodo article seems to put the 360 above Apple TV in the rankings, but the comments include people who swear that their modified xboxes provide a comparable (if not superior) experience to either, sans the ability to purchase content.

Our current behavior is to purchase the handfull of TV shows that we like via iTunes either a la carte or with a “season pass” and watch them on the laptops.

Are there any Dopers out there going purely internet for their home media consuption? Friendly (or even snarky) advice is always appreciated.

You didn’t mention what model of Sony you have, but I’m going to bet that it at least has S-video input. If so, that is going to be the best way for you to get the feed from your laptop into your TV. Looks like the laptop you have comes with an S-video out so you should be ok on that side. Be aware that the resolution that you see on you TV is much much lower than your laptop can support. I think a SD tv is around 640x480. So you’ll have to lower the resolution on your laptop first. I’d suggest that you get one or two programs that you download, and see what they look like. I’m going to bet that once you see how they look on a 32" screen at TV resolution you’ll perhaps want to rethink just spending the $60 on DirectTV.

Good Luck!