Raspberry Pi: Cheap XBMC HTPC
XBMC has to be one of the best open source media centre projects around. It runs on everything from Windows, Linux and OSX to the Apple TV and even the original Xbox. Building your own PC to use for XBMC can be expensive, but now you can have a cheap (and by cheap I mean $25-$35) system on a chip to run XBMC at 1080p.
The Raspberry Pi in an inexpensive programmable computer that can output 1080p video via HDMI. The device also supports AirPlay, which makes this a great device for streaming video from your iPhone or iPad as you can see from the video below.
Currently you will have to build XBMC from source to run on the Pi, but from the sounds of it, they will be offering binaries real soon. In the meantime, drool over the following video of XBMC running on the Pi. Soon, you can have 3 or 4 of these awesome HTPC devices running all over the house for less than $100.
[Link to the Raspberry Pi]