Recently, Microsoft released "media center extenders" for people that wanted to keep their media center PC as an office computer, but watch video/audio in other parts of the house. Those devices seem to struggle from network problems and high prices ($250-300 each). This review covers the xbox version of the extender, which is only about $80 and seems to do everything well.
I recently picked up a hacked xbox that I'm using to stream music/photos/video from a PC in my office downstairs to my TV and it works fantastic. I'll post a review of the unofficial Xbox Media Center software in a few weeks.