This is a critical time in the evolution of HTPCs.
What can an HTPC do? Lots of things, and in the immediate future, almost whatever you want if you are willing to spend the money.
The current/old way to do things, as I understand it, is to pick some functions for your Home Theater, and have your PC take care of them in a nice PC-like way. Because a single HTPC cannot do every function you would want.
For example, it could not replace your set top box from the cable company. The set top box provides digital cable (perhaps hi def digital cable), and pay per view, and you get to pay a rental fee, plus you get an extra remote and extra cables. Same thing for Tivo, etc. which sometimes is the set top box in another form provided by the cable company. And of course now set top boxes can include recording capability, making them more HTPC-like.
If you limit yourself to anaolg cable, you can do "almost everything" with the HTPC, without a set top box. But no digital or HDTV. Also most TVs out there, and PC tuning cards, are analog cable ready, so the tuning function of the analog set top box is no longer required by most.
For an HTPC to at least partially replace a set top box, you need some extra goodies, namely something called a
cablecard. These cable cards evolved with little public awareness, in response to the mandate from Congreess in 1996 to allow for competition in the set top box market. There was some excitement at the time in what set top boxes would become in the home...but these cards initally were only single stream and one-way so that devices that used them could not allow for pay per view or other interactive services, and you could only record one channel and watch that one channel.
Today with cablecard 2.0 you can have 2 channels and some 2-way capabilities. But the cable company has to certify/link your device to the network (in person). And to make things nearly impossible, they have been unavailable for the PC until recently. You could theoreticall get a cablecard-ready TV, get a cablecard from the cable company, and have them come out and install it, to bypass a set top box. Needless to say, set top boxes have up to this time been the necessary evil.
Now you can have an HTPC with a cable card or two. You can
have this HTPC, but you cannot build it yourself, because of licensing. You must get an OEM HTPC with the cablecard as part of the deal.
In a nutshell cablecards ensure end-to-end encryption for the HDTV industry. But at least with them you can use Vista or OSX on a PC to run your own HT more completely than before. In addition Downloadable Conditional Access System (DCAS) is theoretically coming soon which is a software alternative to cablecards.
Not sure how DCAS will be implemented on HTPCs though...
These 2 HTPCS allow you to play HD-DVD as well as Blu-Ray
http://pcjoint.com/okoro-bx100-and-bx300-htpcs-read-hd-and-blue-ray-discs-from-a-single-drive/