Give your PC a high-def DVD overhaul with Lite-On's internal Blu-ray drive. It's available from Newegg for $129.99 plus six bucks shipping.
Regular Cheapskate readers know that I'm a big fan of media-center PCs, which is why I frequently spotlight TV tuners. Now let's round out the movie side of the equation: Newegg has the Lite-On DH-401S-11 internal Blu-ray drive for $129.99--way, way less than the price of a standalone Blu-ray player.
This is a serial drive, meaning you'll need a system with a SATA interface. You'll also need a video card that supports HDCP, otherwise Blu-ray's copy protection will prevent movies from playing. Finally, Blu-ray requires a fair amount of horsepower; if you're not sure your PC has the right stuff, you can download Cyberlink's free diagnostic tool. It'll scan your system and let you know what components need upgrading (if any). On the plus side, the drive comes with the necessary software (Cyberlink PowerDVD) for watching movies on your PC.
Now that Blu-ray has won the high-def DVD war, it makes perfect sense to stock your PC--especially your media-center PC--with a drive like this. If you've already done so, post a comment and let your fellow readers know how it went!