Edit - June 18, 2008
I actually have a multimedia box now, and I didn't even have to pay anything for it. In the spirit of the original idea, I found an old PC - a Pentium III 600 - and it even had a DVD drive and a TV out card. It was sitting on the street waiting for the garbage men. I wiped it and installed Windows XP, reinstalled the guts into a regular tower case and hooked it via ethernet to my main house PC where I store the majority of my digital TV and movie files. We don't have cable, so I don't have a TV-in card (but I could, I've had one for years) but it works quite well for what we want.
One thing I'd love to do is get a remote for it. Having to get up to "change the channel" sucks. :D