I use a hauppauge MVP.
http://www.scan.co.uk/Products/Produ...roductID=82829
£40 gets you a set-top device with a remote control which will play mp3 & mpeg natively, and will transcode .avi's as long as your pc's processor is up to the task.
It will also slideshow your digital photos & tune into internet radio (i've never used this final function)
Of course, it requires a hardwired connection to your network, but as my bb arrives into the back of my samsung set top box (ie right by my telly) this is not a major problem (i can plug the mvp straight into one of my wifi router's network port)
I'm sure it's not the most elegant solution, but it works and it's doesn't break the bank.