The most recent iMac comes with a nice simple home theater PC front-end called FrontRow, and acts as a nice gateway to your music, movies, and photos using the provided remote. I have one of the new iMacs and I enjoy it, though I must admit I rarely use FrontRow, since I prefer to just stream movies and photos to my TV in the other room (through a xbox running xbmc). Aside from the usability of trying to watch a movie on your mac while it sits on a desk, the major downside is the lack of flexibility in the number of formats FrontRow supports.
This is where MediaCentral comes in. It's a very FrontRow-like app but supports many additional video formats (like xvid, divx, DVD folders on the hard drive) using and plays music from any directory on your hard drive. It integrates online TV streams, online movie trailers, and even EyeTV if you have that running on the same Mac. While it supports a few remote control devices, it unfortunately doesn't support the new iMac remote control.
Overall, I must say I like MediaCentral and if you've got a small apartment or dorm and use your mac for your primary entertainment, MediaCentral is an easy to use front-end that builds on the capabilities of FrontRow.