Using PS3, rather to use HTPC

I installed PlayOn on my Vista HTPC, used my youngest's PS3 as a client, and all works great using Ethernet to the router from both the PC and the PS3 and HDMI from the PS3 to the Panasonic plasma. Defying Gravity looked as good using HULU as it did from the Comcast DVR.

But...my boy wants his PS3 back. I tried using tubeCore as a front-end for PlayOn on the PC and it worked, but the video quality is 'way worse than the PS3, the picture is letter-boxed, and the playback from, say, Hulu is choppy. I'm using S-Video from the HTPC to the TV.

The HTPC is out-of-date (AMD Athlon c.2006, NVidia 6200 graphics card, 1 GB memory). Would new parts help? Should I invest in an XBOX? I do no gaming so buying a game console just for internet TV seems overkill, but these are pretty powerful boxes and maybe that's the way to go. Or maybe I'm missing something? Any help would be much appreciated. Thanks.

Thanks, very much appreciate the reply. This seems like the best way to go.

Thanks a lot xclanx. I'll try this on my current HTPC before I order parts per cancre23's reply for a more powerful PC. I suddenly realized after posting (d'oh!) that last month I had built a new computer for one of my boys (http://www.extremetech.com/article2/...2346482,00.asp) so today hooked that up using it's on-board video via HDMI. Good news. HULU and Netflix watch-instantly both work fine through the browser, less good using MC (Win7, no Netflix). Love this forum!