In my ongoing quest for the ultimate media player I have tried out many products (XBMC, SageTV, BeyondTV, VLC Media Player, and others I cannot remember at the moment) on many platforms (Linux, XP, XP MCE, Vista Ultimate, xBox); all of them worked but had various issues that made them 'not perfect' (usually not supporting MKV files without some CODEC hacks).
I have been testing and having difficulties (most likely with the ATI 3450HD card) with the latest release of XBMC (release alpha3) on Windows Vista so I formatted and tried Windows XP; the problems persisted. I was going to attempt an install XBMC on Ubuntu 8.04, but the video does not appear on my TV (and I do not feel like putting a monitor on it)- so I abandoned that idea.
On a whim, I installed iMedian HD that came along with a VFD Display/IR sensor I purchased a few weeks ago (on close-out for $50) and I have been very impressed with the software: nice interface for video, music and picture viewing; multiple CODEC support (including DiVX, MKV and others I have yet to test); and network streaming.
I will need to test more and give a better review of the software- initially I am very impressed...