Here is the software you need to run Windows Media Centre PC.
You don't need much software, and it is important you install as little software as possible. That means no games, no crazy video format decoders (Windows should be able to do almost everything, and some decoders will interfere with the smooth running of the stock decoders).
but you will need at least....
Windows 7 Home Premium or Ultimate edition - A$150
Home Premium or Ultimate versions are the only ones with Windows Media Centre
That will give you HDTV, recording and half decent DVD playback/upscaling as well as upscaling of DIVX/whatever files
Windows Security Essentials - $Free
Basically it is the Anti virus system available for free from Microsoft.
It rates well in the defense ratings and most importantly has the smallest performance footprint (ie it has the lowest load on the system). Download it for free (assuming your windows is "authentic").
Those were the bare minimums, these are the things you will need as you move on up.
AnyDVDHD - €79
This is the most useful utility for a media centre. It is central to converting DVDs or Blurays to ISO images, as well as performing the automounting of ISOs etc etc...
The lttle red icon sits on the task bar, you will find you use it again and again.
It is a great engine for mounting ISOs as well.
They are constantly updating and upgrading, so the price is justified for the free updates..
Arcsoft Total Media - US$89
Essential for the proper playback of Bluray.
Essentially Windows media centre can't play Bluray because of all the rights and security bullshit, so you have to buy player software. There are others like powerDVD, but TotalMedia Theatre 3 is the one I am used to, and it does a great job..
A license fee needs to be paid to legally play a bluray - and thats part of the cost.
Having said that,This has a bunch of extra features that allow your PC to behave like a proper Bluray player. Its a pretty good product, and if you buy it, you get upgrades and the like...