I just have my media center computer hooked up directly to my TV. Originally I used MythTV on it, but then switched to Boxee. Then like 2 months ago the video blew up. I narrowed it down to an esoteric hardware problem. So I removed the TV capture card because I don't actually *watch* cable... It's stable for now. Hopefully it will continue to not explode.
DLNA/UPnP is probably the best way to share media over the network for watching it. There's XBMC and MediaTomb. There's also a really lightweight console based UPnP server, but I can't remember it. Make sure the client device can read whatever you're sending it. For example, the Xbox 360 will not play MKV files.
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