First off, I have read some reviews that say it is media center + windows XP HOME edition.
They are off, its run with the same features as the pro edition plus the media center.
First of all I have the new 2005 edition and LOVE IT.
The interface has been dramatically improved. The TV quality, with the right video card is very good on small and medium television and computer monitors.. but on LARGE SCREEN TV's.. begins to lose quality.
I can (with my tv tuner) watch live tv. record tv. instantly pause and rewind live tv just like TIVO. There is a tv guide where you can view 2 weeks worth of tv shows and record shows by time or series.
You can listen to music watch videos, look at pictures or listen to the radio along with watching dvd's all through the media center.
I bought a new dell.. and for $39 extra.. it was well worth the purchase!