I thought I'd post an update on this.
First of all, I decided to make this more of an home theater media center that will sit next to the living room screen. But, I also want to have IIS running on it and transcode all the video for the web (home intranet, not public internet).
So, after shopping around for a good setup and came up with the following:
- Case. There are some decent HTPC cases around, but I feel they tend to be too cramped. So, I picked up a regular black Lian-Li case. I did some minor mods to it already:
- Removed all fan grilles to make it quieter (less air turbulence) and more free-flowing.
- Cut a hole out of the motherboard tray to allow me to add/change the heatsink without having to remove the motherboard.
- Re-routed the front-panel USB/audio cables under the drive carriage. In stock form, those wires were bent rather harshely.
- I'm not sure if I will have it standing up or lying down (like a normal stereo component), so I added some rubber feet to one side so I can go either way.
Picture 1 and picture 2 of the case showing the mods. Nothing special.
- Motherboard. I opted for the P67 chipset, specifically the ASRock P67 EXTREME4 GEN3 mobo. I have an ASRock in my main rig and it works swimmingly. I am still a bit up in the air about the Z68 chipset. The only advantage to the Z68 is SSD caching (which I won't be using) and the ability to use Lucid Virtu (which would help video transcoding). But after reading about Virtu, it seems like it's still too new and needs to go through a revision or two to be truly ready for primetime. The P67 chipset is mature, so I expect fewer issues.
- Processor. I don't need a lot of power when it's being used to watch a video or playing basic games, but since I do plan to do some video transcoding over the "web", I wanted something with some oomph. My main rig has an i5-2500k not overclocked and when I did some test video conversions, CPU usage was pretty high. So, I'm going to go with an i7-2600k since it has Hyperthreading. The extra 4 logical cores should help, and I may overclock it a little, depending on how much the CPU is being worked during transcoding.
- Cooling. The case has a 120mm fan in the front and the rear. Like I said, I removed the fan grills for smoother airflow and less noise. For the CPU, I'll be using a COOLER MASTER GeminII S524 setup. I like this unit because it will help cool the CPU, RAM, and any other nearby components.
- Memory. 16GB (4x4GB) of G.Skill DDR3 PC12800 RAM. Should be enough.

- Video. Since we might play some games on this rig, I'm planning on a nVidia GTX560 video card. Not top-end, but should play any games I have at decent speed.
- Power supply. After reading some reviews (especially at hardwaresecrets), I opted for a mere 650w supply, the OCZ ZS Series. I don't plan to use SLI, so it should be plenty (uses a single 12v rail rated for 46A).
- TV Tuner card. I decided on a Hauppauge Win TVR-2250. It has dual tuners and hardware mpeg encoding to reduce CPU usage when recording shows.
- Storage. The main drive is a 1TB SATA drive. I'll allocate ~500GB for recorded TV programs. I was going to spring for an SSD, but I really don't need super fast loading of programs or fast booting.
For the media storage (DVD iso's and MP3s), I'm thinking a 3TB SATA drive which should be good for ~700 DVD5 iso's. I was going to do a 3TB RAID1 setup, but after thinking about it, I really don't need/want a real-time backup. Besides, if something electrical goes wrong, both drives could be wrecked. So, I opted for an external 3TB drive for emergency backup. I'll come up with an automated script to make sure the external and internal drives are synced.
- DVD drive. We don't have/rent very many Blue-Ray discs, but just in case, I opted to get a BR drive. A bit more expensive, but it'll be there just in case.
- OS. Going to use the OEM verison of Windows7 Professional 64-bit. It has IIS 6 built-in, so all I need to get the web service up and running is to download and configure MySQL for the database.
I already got the case, power supply, TV tuner card, and external 3TB drive, but am waiting for tax returns to get everything else. Plus, I notice prices on my Newegg wish list tend to drop by a few dollars daily, so hopefully prices will keep falling before I make the final purchase.