This what i do:
http://www.boxee.tv its a free open source program that runs off xbmc platform. but now you can play any kind of file there with a slick interface and it auto grabs the dvd covers for your files, avi, wmv. mkv etc.
They took off the windows version off the site till it's final release, but just get it from a torrent site. Join @ boxee.tv for an account (turn on privacy in your acct so others cant see what your viewing.)
They also have youtube,mtv, nbc, joost and many internet feeds already embedded in the program as well. and you can add rss feeds
It's great for a HTPC, running it myself @ 1280x720 & 1920x1080 on a 42inch LCD for my 1080p movies.
Planning on getting an Apple TV modding it and putting boxee on it as well so its small and convenient, and it also streams.
Gluck
