In a nutshell:-
HTPC is nothing but an ordinary desktop computer with the addition of a decent graphics card like HD 2600/ 3450, High and a better quality sound card . You may go for a remote but in addition I will suggest you to also go for a wireless keyboard and mouse combo as it will provide greater control on the HTPC. Now since LCD's are predominating in the market , you can hook up the htpc via an hdmi cable for 1080p output. If you have an av receiver make sure to opt for a sound card with digital out . this will enable you to connect your HTPC via a Digital chord to your receiver to experience 5.1 sound.
Advantages :-
1)You can play all the movie formats that exist today , starting from mkv to avi
2)Better sound reproduction than most budget to comparatively Expensive DVD players. This is one thing i can vouch for, many time I connect my xps laptop to my av receiver via a usb adaptor ( the adaptor has digital optical out) and the difference in the sound ( especially the bass) is noticeable.
3)If you go for a 1 TB HDD then you can store all your( maybe most of them for some people
) movies , songs, pictures etc in one complete solution !!
4)HIGHLY SCALABLE - When Blu ray becomes cheaper, just add a Blu Ray rom and hey presto you have a blu ray player ( Pls go for a decent process such as core 2 duo 2.2 ghz+ or a comparable AMD as they are not much expensive nowadays). Short on space no problem - add another 1 TB of HDD and you are good to go.
hope this helps!!