In a nut shell here is the setup:
1. An old PC running Naslite to share media content.
2. A Network is required to distribute the media.
3. AppleTV as the hardware connected to your display.
4. XBMC to navigate and play the media.
Optionally:
" An original Xbox instead of, or in addition to an Apple TV.
" Use an Ipod touch/Iphone as a remote (highly recommended).
In this Instructable I'm assuming that you have a fairly good understanding of computers. (This isn't an idiot's guide either.)
This Instructable won't get you a room like this, but it will get you a system worthy of it.
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I'm opting not to give a step by step on how to rip DVD's or convert them. There are already too many tutorials out there, and too many different ways to do it. Here are the programs that I use and a few tips to make your life easier than I had it.
The programs I used for this part of the process:
AutoGK
DVDshrink or DVDdecripter (or program of your choice)
Terracopy is also good to help movie files around.
Use these sites at your own risk, if you're not sure about them don't use them. Get these programs from friends, if they don't have them get new friends!
Reauthoring
Most ripping software allows you to re author DVD's, getting rid of the menu, trailers, and commercials. I prefer to rip and save only the main movie. Ripping takes about 30 minutes.
Quality vs. Quantity
I have found that most movies, and especially tv shows don't need to be watched in HiDef. I just don't need to see episodes of friends in 1080i with full surround sound. Besides I'm a big fan of the classics, they aren't in HiDef and are usually in black and white. This is my opinion, so you need to decide what's most important to you, video/sound quality, or smaller files and less quality. Each has its pros and cons, which all boil down to Quality vs. Cost. The AppleTV does support 1080P and 5.1 surround sound, XBMC supports upscaling which will be more than DVD's can muster. So if you want to watch HiDef go for it.
I chose to do my movies as AVI using the DIVIX codec, with single pass encoding. I set my quality to 75%. I can't tell the difference from DVD, even on my 1080i projector. Using the divix codec the file size is 800-1200MB instead of 4-6GB per movie. Encoding takes about an hour on a fast PC. When it comes to my favorite movies like Lord of The Rings or Star Wars, I do keep the original VOB files to keep maximize quality. If I want the extras, I make an ISO of the DVD. Some films defiantly warrant Hidef and surround sound.
File management
XBMC handles movies as single files far better than each movie in it's own folder, containing several files(JOB rips). You especially run into trouble with multi disc sets. And TV shows with multiple seasons. Converting your movies to AVI is a good way to handle this.
XBMC will automatically download movie info and cover art from IMBD and other sources. This makes name critical, not only are their thousands of movies out there, there are remakes, and even different movies with the same name. After ripping I search IMDB, for the exact movie name, then copy and past the name with the date. Ie, "Iron Man 2 (2010). AVI" this eliminates the chance of XBMC making a mistake. This only takes a few seconds and will save tons of time and headache later.
XBMC doesn't handle parental control too well, but one easy way is to separate your kid movies from your non-kid movies. I have KID MOVIES, MOVIES and MOVIES R, which I put G & PG, PG 13,and R movies into respectively. XBMC allows password-protected profiles, and you can select which profile has access to which folder(s). If you add another hard drive later, the same filing convention will still work with minimal changes to XBMC.
Your Master profile can be set to see all sources (all of the drives/folders)
Your kids' profile can be set only to have access to MOVIES, and KID MOVIES folders. (However you want)
Take advantage of the Que feature of AUTOGK. I had my computer running 24/7 to convert my 400 movies. And even at time had four other computers converting at the same time.
So here is the break down 30 minutes to rip, one hour to convert. (Longer for TV episodes). Let say, you have a modest 200 movies. 1.5 hours X 200 = 300 hours to convert. That's 1 PC converting for 12.5 days 24/7! Don't go crazy, just do a few every night and it's amazing how fast it goes, if you keep at it. It's worth being able to box up all of your DVD'S and put them in storage to prevent theft, damage, and from that neighbor who never returns movies he borrows.
"TV Shows"
XBMC uses "Scrubbers" to determine which episode of which season each file corresponds to. In order to do this correctly naming is critical. it's quite simple, put each episode, in a folder for each season, or even put them all in one directory, then name them like so: Season Title.S##.E##.avi for example Alias.S02E12.avi here is a site the explains all about it.
http://xbmc.org/wiki/?title=TV_Shows
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I already had a PC with Vista Home Premium and 2 360s so all that was left to do was buy 2 pci tuners under $50 each so the entire cost in hardware was under $100