Even though we are building what could be considered a budget system we didn't want to make sacrifices just to hit a target cost. This is apparent in our first component selection: the case. We didn't want to use some cheap tower and power supply package. That went against our plan to keep this system around for a long time and eventually place it in our AV rack as a dedicated PVR and file server. We chose the SilverStone LC17 for our case. SilverStone makes many different HTPC style cases, but we chose this one because of its two large cooling fans, six internal hard drive bays, plain black front (no VFDs or exposed ports), solid construction, and it is rackmountable. We ordered all of our parts from Newegg.com. Here's a picture of the inside of the case with the optical drive cage removed. Cost $140

The LC17 comes with a USB/Firewire/audio panel mounted in the front 3.5 inch drive bay. We pulled out the cage and replace the panel with a multi-card reader and USB port. Cost $9
The next step was to install the power supply. We chose Antec's NeoHE 430. It's a 430W high efficiency power supply . The large cooling fan, quiet operation and modular cables to reduce clutter made it desirable. It should provide enough power to handle additional hard drives we'll be adding in the future. Cost $86
This brings us to the centerpiece of our build, the Foxconn 955X7AA-8EKRS2 motherboard.  This board is the key to our future upgrade path. It features Intel's 955X north bridge sporting an 800 or 1066 MHz front side bus. We're going to be dropping in a commodity Pentium 4 chip, but the LGA 775 socket means that we can upgrade to a dual-core Extreme Edition CPU once their price enters the troposphere. The south bridge is Intel's ICH7R which provides 8-channel sound through the board's analog connectors and also through the digital coax and optical connectors. Up to 8GB of DDR2 memory can be used in the board's 667MHz dual-channel slots. We'll only be using two of them to leave openings for the future. The board features 2 PATA, 4 SATA, and 4 SATAII connectors. There are built in RAID controllers on each of those banks. If that wasn't enough to make the DVguru guys drool, the board also has headers for 2 1394a and 1 1394b port. 8 USB ports are available as well. Cost $183
Our processor is an Intel Pentium 4 630. It's a 3.0GHz chip with Hyper-Threading and support for 64 bit instructions. A nice feature set for the price. We are using the stock fan and heatsink since we aren't planning on overclocking and the computer isn't going in our AV rack yet, so we are not as concerned with noise. We went with Intel instead of AMD because we wanted to get the more valuable QMD units while folding. The chip latched into place easily and the heatsink is installed by pressing on the four posts around the perimeter. Cost $171
Nothing too particularly interesting about our RAM choice. We knew we wanted 2 x 1GB DDR2 and didn't want to spend more than $200. We looked through user comments and chose a Mushkin 2GB dual channel kit which came with heat spreaders. Cost $200
For an optical drive we went with a cheap OEM Sony DVD burner since we didn't want to pay a premium for a dual layer drive. In retrospect, we could have spent a little more to get a drive that isn't as loud as this one. We only expect to use this drive to rip DVDs, not actually watch them, so it shouldn't interfere with our movie enjoyment. Cost $40
The hard drive is a Western Digital Caviar SE 250GB SATAII. Cost $100
This is just a starting point for use as a desktop system. In a couple years when we decide to retire this system to PVR/file server only use we will be able to upgrade the box to 4TB of storage for $800. That's why we picked a case with so many drive bays and a board with built in RAID.We chose the Leadtek WinFast PX6200 TC for our graphics card. We don't use our desktops for gaming so we went really cheap. We only needed a DVI card that could drive our Dell 2405FP at 1920x1200. The card is fanless so we don't have to worry about it contributing to the system noise. It features component outputs so we can get a high quality picture on a TV since most don't have VGA or DVI. Cost $59
The final component we added was a Hauppauge WinTV-PVR-500 MCE dual-tuner card. The card has MPEG2 hardware encoders built-in so there will be almost no load on the CPU when recording. Hauppauge cards also have good support under Linux. The majority of TV tuner cards being produced right now are based on ATI chipsets and should be avoided like the plague if you plan on running a Linux based PVR. This is the same reason we went with an nVidia chipset on the graphics card. Cost $138

The total for the base system is $988. The addition of the TV tuners brings the grand total to $1126. We've talked about the upgrades we plan on making in the far future, but the only thing we have planned in the near-term is adding anHDTV tuner that can do OTA and QAM for $169. Since building the system a month ago it has been happily running MythTV on top of a Gentoo Linux. We followed the MythTV install instructions on the wiki. We've got partitions set aside to try Windows XP MCE and OSx86, but haven't had a chance to try them yet.