For Blu-ray, I'd go with the PS3 (or a standalone Blu-ray player). For other media, though (mkv, old avi files, etc), I'd go with the HTPC. I have an 80GB PS3 (the earlier model that came with MGS4, still with PS2 support) and it's been a headache trying to get self-encoded mp4 files (yeah, I used the MeGUI PS3/Xbox360 profile) to play properly. With the new firmware update, DivX 5/6 playback (using Home Theater Profile) improved a lot. I used to get a lot of artifacts before (green/black dots, squares, vertical lines, etc) and now DivX 5/6 is pretty much perfect. Funny thing is, I've got a bunch of files encoded for the PSP which play perfectly on the PSP but feature the same weird artifacts when played on the PS3.