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Multi-media Entertainment Systems can come in a variety of shapes and forms. One of the most common is the Home Theater PC. Home Theater PCs are essentially computers with custom designed interfaces so they may be used with a remote from the comfort of a couch. The benefits of a Home Theater PC are that they can run a variety of operating systems such as Microsoft Windows Media Center which was designed for Home Theater PC use. Some other options might be Linux based which has a variety of operating systems that were created for Home Theater PCs.
If you don’t need all the options that a Home Theater PC has, and perhaps would like something a little simpler that is easier to use or setup you might consider checking out video game consoles. Many game console support services like Pandora for internet radio or Netflix for watching TV and movies. Another thing to consider is what kind of cable carrier you have, maybe premium channels is something you would benefit from, more so than Netflix. You might want to shop around and compare cable rates from Direct TV vs Dish Network.
Additionally they may also be able to stream movies from your personal computer, useful if you are downloading them. The Playstation 3 also has a built in Blu Ray player, where the Xbox 360 has a built in DVD player which could potentially further simply your installation and the amount of things you need to have hooked up in your living room or wherever your TV might be.
If you don’t like any of these options so far, there are specialty boxes intended just for movies and music and TV. Most are very compact, some feature hard drives and all of them should be able to utilize some form of streaming internet media, such as Netflix or Amazon on Demand. Apple makes one simply called the Apple TV which works with all the content on the iTunes store. Western Digital has a "WD TV" box that is becoming increasingly popular among hacking enthusiasts for its ability to be easily modified with extras and options it didn’t come with.