The Premium flavour and above all have the Media Center component, Vista and Win7. Most of the retail PCs (except netbooks) have Vista Premium today and most likely will have Win7 Premium. I'd also get at least this flavour if you are a DIY-er.
Go with a PC-based playback system for home video/audio only if you enjoy "tinkering" with computers, Media Center or not. If not - stick to players like PCH, HDX, WDTV, etc.
With enough time and sweat invested, you can make your HTPC as good as a Kaleidescape system while costing less than a tenth of it.
Vista will NOT let you have independent control of two monitors if one of them is a TV.
I don't understand where this come from - certainly nothing to do with reality.
You have to be careful when assigning primary/secondary monitor, mode they use, and rendering engines your player uses - that is correct.
I have not tried to burn a tv show or anything like that, but MS being MS, they make sure they respect "do not burn' flags...
Never heard about "do not burn" flag.
There are "copy-never", "copy-once", "copy-free" flags with digital broadcasting, but obeying these flags has nothing to do with "MS being MS"...
Diogen.