Depending on how adept you are with computers, you may want to look at some of the things at
www.newegg.com - they seem to be a good low-priced source for parts. You might consider a build-it yourself system in a small case. Alternatively, look at
www.slickdeals.net - they often have very good deals on kit through companies like Dell.
I've been contemplating doing something similar, but I want mine to have a region-free DVD player and a video card with a TV output, all hooked up to my DSL line and my TV and stereo. That way I can watch UK DVDs, watch live feeds and listen to audio streams. How sad is that?