Which part of transcoding is being a pain in the ass? I find fuppes ( http://fuppes.ulrich-voelkel.de/ ) to be working perfectly. If you're trying to transcode high def mkv/ts/etc, I agree.

Transcoding is a pain in the ass because it requires another computer with a decent CPU to decode in realtime (which means you can't run it off a NAS or some other server-based disk backup, unless you want to shell out the bucks for a really overpowered backup solution).

If I'm going to go through all that trouble and cost, it makes more sense to buy a low-cost ION GPU HTPC ($300) that can just run the video (even HD) without transcoding.

Worst of all, when transcoding you are needlessly discarding data and therefore picture quality. It you don't have to, you shouldn't.

got one of those ion pcs, i recommend it, and your sentiments about how this all fits together. i think a machine really can only do one thing really well (especially something high performance) at a time, and often MPC software tries to do too much at once.

I had an ASRock NetTop 330, measured the wattage draw while playing a 1080p film, it was pulling about 15 watts from the wall. Pretty damn impressive.

Are there plans for PS3 XBMC or is that just wishful thinking on your part?

There are no immediate plans to port XMBC, but it is open source so all it would take is some determined people and some time to make it happen.