Brother if you are looking to do this on the cheap,
Your OS should be something solid and well used
like Windows XP Media Center Edition, 3rd update
your software should be Nero-10 for burning and stuff
Convertxtodvd3 for burning dvds in NTSC and Pal
DVDdecrypter for breaking/copying dvds
VLC Media player for playing almost any files
RIVA Flv player, to play flash, and a shockwave player to
play shockwave flash. All these programs, minus Nero-10
are free
Your only other hardware
External Portable Harddrive, at least 1-2 TB so you can back everything
up fully.
My best advice is to put new harddrives, and some other new parts on the machine.
Probably at least 500-750 Gig hd's into the machine, and load in XP media center
Dont ever Run Windows Media Player. Just uninstall it, it is garbage.
Other than that, add in a decent graphics card, and some better speakers, or audio reciver
and you would have yourself a decent center.