Depends what you want it to do?
Music server to standard definition AVI/DVD's, and HD as well? Recording from TV/Sky/Cable? Music playback? Also need front end software and remote control.
You could use a spare PC you have around, ie PIII 1ghz, that's fine for music/avi server. HD playback will require 2ghz CPU. I use a A64 3700+, MATX, 1GB, 500GB storage. Plays 1080P, and scan scale SD to HD rez.