Little update, instead of the bedroom htpc, I decided to go with the Xbox 360 route. I got an Xbox at amazon for $200 with a $25 gift card, and for the funky video formats and anything the Xbox can't play, picked up a Western Digital HDTV Live Streaming box from Staples for $99 with a $30 off $75 coupon. So for basically $245, I have full extender capability. I am super happy with it. The Xbox mimics the MC7 interface perfectly, and I can watch all my recorded shows and live TV with no problems. It will even play most of my avi files from my network without issues, once I installed the optional media update from Xbox live. (the free version) I really haven't had to use the Western Digital all that much, but it has been great to have for those few that won't play, plus Netflix, Vudu, HuluPlus, Youtube, all that crap. And the Xbox works flawlessly with an old MCE remote I had sitting around, right out of the box.
I think for the price, this is the perfect extender solution. Yeah I've got three remotes to juggle right now, but another $100 for a Harmony remote would fix all of that. Next time I see a great deal on an Xbox, I'm going to buy this exact same setup for our TV downstairs. For the price, hell, even at a higher price, this is a great extender setup.