You may still need to manually install a few video codecs to get Windows Media Center to play certain types of video files; also, WMC doesn't offer some of the more advanced features of some free/open-source competitors.
XBMC and OpenELEC
XBMC began its life as the Xbox Media Center, a utility designed to transform the Xbox gaming console into a robust media streamer and playback device. Limitations of the Xbox hardware eventually forced some of the original coders to move on to other projects designed for the PC and other platforms, but the open-source XBMC lives on and has now been ported to virtually every modern computing platform, from Windows PCs to the diminutive Raspberry Pi.
XBMC has even been paired to a streamlined Linux distro and made available as a stand-alone media-streaming OS called OpenELEC, the "Open Embedded Linux Entertainment Center." On supported hardware, OpenELEC can be installed in minutes, and it consumes only 125MB or less--meaning it could be run from a small flash drive.
No matter what operating system you're running, XBMC is an excellent HTPC front end. The application supports virtually all digital video, audio, and photo standards. Its installation and initial configuration are simple: Run the installer, select the folders where your files are located, and boom--your home theater is ready to rock.
Even better, XBMC's interface is remarkably intuitive and easy to navigate. XBMC also runs very well on underpowered hardware, making it ideal for low-power PCs built using Raspberry Pi or other tiny computing devices. For example, during my testing, XBMC was consistently very quick and responsive on an AMD E-350 APU-powered HTPC, whereas some of the other applications discussed here (like MediaPortal, below) ran somewhat sluggishly.
I should mention that XBMC is eminently customizable, and skinnable to boot, so it's perfect for theater enthusiasts looking to give their HTPC a distinctive look.
MediaPortal is a free, feature-rich HTPC front end that requires a bit more tinkering to get properly configured than something like XBMC or Windows Media Center. Still, it's worth taking the time to master if you want a home theater PC with an open-source operating system that can do neat tricks like streaming to mobile devices. MediaPortal was actually born from XBMC, and is still being developed by some of the original coders behind the Xbox Media Center project, but it has evolved over the years to the point where it is basically a completely different program.
After you download and run the MediaPortal application, it will automatically install a bunch of codecs and a third-party software package. It doesn't require any major user intervention other than to specify installation paths, but the interface and process may seem somewhat complex and arcane if you're not used to setting up open-source software.
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