Actually what I've read is that the reason that they insist on hardware encoding/decoding is not so much resources as 'rights management' With the ATI's it requires additional software, and thus it can be bypassed. MS wants hardware because it's harder to bipass things like Macrovision (but not impossible by a long shot). I remembe he big stink it made in some of my video editing mags at the Univ. As it basically meant MS was taking sides on te issue, and it did turn out to be the case, there are other 'rights management' programs MS is adopting/changing.
That's what I read was the reason.
It would make sense that you'd want hardware as to make it easier and really show of a MediaPC, however I hadn't heard that (not that it doesn't mean that it ain't so, just hadn't heard it so I may be out of the loop).
In the end really there is Little NEED for MS Media Center Edition, an article by Anand in this month's CPU gives high praise to ATI's MMC a a good all-around suite. The two things he mentioned as lacking vs. the MCE was a specific start page and that th Guide+ wasn't instegrated on the main MMC interface (it has it's own). I would recommend reading it if you can get your hands on the AUG. issue of CPU.
In any case I wouldn't worry about it in the long run, most systems being buiult for MEdia Center applications can handle some of the work. It just means no multi-tasking. However a P4 3.06ghz HT with over 1 gb of ram should have no trouble with he basic task of encoding. IT will stil of course be noticeably slower than a PC which can off-load this task to a stand-alone card.
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