[noggin]

Is the GPU not used for HD video?

Yes - but having a more powerful GPU doesn't mean the video decoding quality improves. All current Intel Celeron, Pentium and Core i GPUs can handle 2D 1080p H264, VC-1 and MPEG2 decoding without breaking a sweat. (Celeron and Pentium don't have support for Full HD 3D which requires MVC support - though they will play SBS 3D stuff fine - as effectively this is lower res 3D within a 2D wrapper. At the moment XBMC doesn't handle MVC 3D stuff internally anyway - though you can play it with an external player under Windows if you have a Core i chip)

GPU power can have more of an impact in scaling, post-processing and de-interlacing - but to be honest - for 1080p content, it really doesn't make much odds how powerful your GPU is.

Clarkdale, Sandy Bridge and Ivy Bridge GPUs have a small issue with support for 23.98Hz output (it doesn't quite output a 'perfect' refresh rate so every 7 minutes or so you may see a repeated or dropped frame if you have a 24p display fed 24p.) This has been fixed, apparently, in Haswell.

Proper VAAPI de-interlacing support for native interlaced content (i.e. Live/Recorded 1080i TV for sport, news, entertainment etc.) is still in development - I'm running a Dev version of OpenElec on my Celeron 1007U based Acer Revo to get proper 1080i to full frame rate 1080p de-interlacing (50i to 50p rather than 50i to 25p in my case)

However if 1080p decoding is all you need - even a basic Celeron low power Celeron will be fine.

I run Aeon Nox on my Celeron 1007U and it's fine. Sure it may not be quite as fluid as a Core i7 would be - but it's still absolutely fine.

Does the Celeron have HD Surround Sound via HDMI?

Yes. Under Linux and Windows there are no real issues getting HD Audio (Dolby True HD, DTS HD MA, DTS HD HR, PCM Multichannel) and legacy lossy surround (Dolby Digital and DTS) audio bit streamed over HDMI. OpenElec does it out of the box on all of my Intel builds (Celeron 1007U in Acer Revo, Core i5-3xxx and Haswell Celeron in an Acer Chromebook C720)

[Stildawn]

Ok I'll give that celeron cpu a look then, hopefully the matching mobo's doesn't jack up the price.

[Dougie Fresh]

They are more expensive in NZ, and that CPU sounds terrible.

There are dozens of threads on this site alone that demonstrate how well the Celeron mobile CPUs perform with OpenELEC. I even wrote one myself based on my experiences building dozens of them. I would not judge a CPU simply by its clock speed. Even the lowly C847 hardly broke 30% CPU utilization with high bit-rate H.264 videos.

[Stildawn]

Ok will certainly look into it. Here in NZ though in my experience Intel boards are usually more pricey than AMD ones. But we'll see.

Nope looks like I can get one cheap.

So heres the build now:

Celeron 1620 (cheaper than the 1610): $65
Asus H61M-A: $90
2x2gb Ram: $60
500gb HDD: $70
Antec NSK2480: $140

Total: $425

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Do you guys think it would be better going with this: http://pricespy.co.nz/product.php?p=2009767

Instead of the 500gb HDD, this is the cheapests SDD I could find that is around the same price as the 500gb HDD. If I go the Openelec route 30gb should be more than enough space.

[teeedubb]

I'd get a small ssd over a big HDD for my boot drive, booting from a HDD is painful after using a ssd, although it may not be so bad with OE because of its small footprint. Not to mention that my 5900rpm HDD isthe noisiest part in my gaming htpc with 7 or so fans. 30gigs is plenty for OE.

Edit: it may be cheaper to buy a ordinary ssd instead of a mSata sad.

[Stildawn]

Yeah I think I am leaning towards the SSD also, there really is no need for 30gb even, as all the media will be on the external anyway.