I currently have a 1TB drive (FAT32 formatted) plugged into my 360, filled with movies, and it works fine. For high-def, I burn movies with a Blu-Ray burner and stream them from my pc using Windows Media Center on the 360.
For music & video downloads, it's hard to beat the Zune service, particularly when paired with software such as SoundTaxi or Aimersoft, which kicks the drm off your stuff.
As for recording from satellite, all you need is a TV tuner/recorder card for your pc. Windows Media Center will interface with the card seamlessly, and the channel guide is more than adequate for scheduling and recording movies or series.
As for browsing the web, Windows Media Center has a plug-in that enables that.
As for networking, my 360 currently connects to 3 pcs and 1 laptop without any issues. Windows Media Center is not required for this, but the interface makes it a much more enjoyable process.
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Bad Luck City
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