I always liked Windows Media Centre. More specifically - I liked its user interface. This was an interface clearly designed with the specific use case in mind, and it worked beautifully. While the UI was great, its feature set always left a slightly sour taste in my mouth; the lack of decent metadata retrieval was its biggest shortcoming for me.
Things like Xbmc and its derivatives have clearly surpassed Media Centre over the years - well, except for one use case: television/DVR. Xbmc, the AppleTV; none of them do television/DVR like Media Centre can. Google TV is attempting to provide good television service, but for now, it's US-only.
The product was also never a big success. I guess the business of setting up a computer for such usage was too much of a hassle for many, and I can't blame them. Following in the footsteps of Google TV, Microsoft is now trying a similar approach: instead of Media Centre on a computer, why not throw it on a set-top box? Before the angry comments come in: the Apple TV plays in a different league than Google TV/Media Centre. Call me when it does television instead of just streaming iTunes content bought on your PC.
The Seattle Times is reporting that during this year's CES, that's exactly what Microsoft will launch. According to them, it will be a box powered by Windows Embedded - however, which Windows Embedded that will be remains unclear. It could be Windows Embedded Compact (what I continue to call Windows CE because Microsoft's naming scheme is utterly idiotic), but it could also be Windows Embedded Standard (the componetised version of Windows XP, Vista, and today Windows 7). The Windows Media Centre interface will run atop this operating system.
This all could also explain the Windows NT-on-ARM rumours; it could be that Windows Embedded Standard, which is currently only available for x86 and x86-64 (it's just Windows NT, after all), has been ported to ARM because this rumoured set-top box uses an ARM processor. However, this raises the question - why simply not use Windows CE?
Anywho, the device is supposedly cheaper than 200 USD, and is expected to ship later this year. From what I understand, the software can also be integrated into TVs.