True the current incarnation of the Apple DVD player does progressive scanned DVD's poorly but the next version coming out with Tiger is supposed to have this fixed with better de-interlacing and hopefully upsampling to HD Resolutions? In the mean time, you can use Video Lan Player which allows you to fix audio sync problems that may occur, and using an USB 5.1 adapter give you your 5.1/DTS output. While having to use an external USB dongle to convert audio, it isn't that big a deal as the box is not much bigger than an Altoid can and can be hidden away with the other cables as once you've hooked it up, you don't have to mess with it any more. I already have a WHOLE MESS of cables behind my amp already, these will fit right in.

Certainly less bulky (but slightly cumbersome with all the cables) than a big PC based HTPC and quieter to boot. Oh yeah, no viruses or spyware either (at least so far).