My HEC computer:
Athlon XP 1800+
ATI All-In-Wonder Radeon 7500 w/ Remote
Sound Blaster Live!
Under $600 for everything that wasn't held over from my previous computer. Held over from the old system were ram, sound card, and NIC. I need to get some PC2100 ram, debating on 256MB or 512MB, or $~30 - $~60 depending. I know a Live! 5.1 goes for well under $100 now. And 10/100 NICs are way cheap. About $20 at the most.
Definitely less than $700 by purchasing everything. And my purchases were made at retail (except the AIW), and I could kick myself for being impatient and not buying online. Could have saved myself almost $100.
If you're set on a mini box like that, the Shuttle ones look to be the same thing. Just get some ram, an AIW, a good sound card, a DVD/CD-RW combo drive (since you've only got the one slot), or maybe a DVD-RW/CD-RW, and a large hard drive, and you should be set for around $1000 depending on how expensive the box is.
As for converting an XBox, FlowJack, are you actually adding PVR functionality to it by way of audio/video / TV input? If so ... do tell
I might be getting an XBox in the near future, and I want to set it up to play not just DVD, but DivX, and my mp3 collection. So I can take my stuff with me. If I can get it to capture video too, that would kick ass. I've already been looking at the mod chips, and getting a larger HDD, converting it to region X for DVD's, and the various console emulators to play all my old games on.