It'd have to be PC. The Xbox has a god awful media player, and it's Media Center Extender thing is equally god awful in a completely different way. The PS3 requires you run special software on the PC side of things if you want to stream content, and it's only real saving grace is the bluray drive. Of course I'd recommend you only watch movies with the PS3 if you have no interest in it as a game console. That's because the PS3's bluray drive is the ONLY bluray drive that can also read PS3 game discs. So why waste the laser's finite life on movies when standalone bluray players will ultimately get cheaper as time goes by, and can be replaced with ease. If you use your PS3, and the drive craps out, then you lose your movie player AND game console at the same time.
What I would highly recommend, is a cheap slimline or compact PC running Windows or Linux and then booting straight into XBMC. XBMC is what Windows Media Center should be/have been. Plays virtually anything you throw at it, free, regularly updated, and loads of options you'll never find in a commercial solution, like being able to automatically skip those annoying intros on DVDs. You can also scrape sites like TV.com and IMDB to get info about TV shows and movies.
I like to rip copies of TV shows/movies I buy on DVD, then store them on an external drive connected to my main computer. I then stream them, via my HTPC. No having to hunt for a specific disc if I'm in the mood to watch say Pysch or maybe watch the movie PCU. It's all right there, ready to go.
About the only thing you can't really do very easily with XBMC is watch/record TV, but it's free so you can't complain too much. And if you're running Linux you could probably easily set up MythTV to automatically record shows and dump them into specific directories that you can then access via XBMC to watch later.
If you don't really care about really high def stuff, you could probably jump on ebay and find an original Xbox. With a quick softmod or modchip installation, you can install the Xbox version of XBMC, which is a bit "slicker" than the other versions, since it was the original. XBMC used to be called Xbox Media Center. The only real issue is that the hardware of the Xbox is a bit limiting in terms of what can be decoded.
Anyway, the PC is a MUCH better platform for this sort of thing. The other two lock you into their own proprietary solutions.
I am agonizing over the 3 choices. I will only play casual games. I want a device to build a media experience around. I know a good media center PC might be the best way but I like the sub $350 cost of the gaming consoles. I am usually on hulu and know that the networks are actively discouraging hulu on the PS3.
Which is still the better choice for a media server? I just sold a sony vaio fw-48j/t with blueray to make this choice. Is there a software or hardware hack that will allow me to route tv signals through the game consoles and maybe let them act as a dvr?
Please not Microsoft is better than Sony comments just focused ideas or opinions.

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