Flyer,
Option 1: Use videolan to stream dvds across your network
Option 2: Hook your WinTV or other capture card to your receiver, you can use it to route signals to the encoder. i.e. stream a dvd from your dvd player, tv from antenna, or even dss.
etc.
And yeah UDP is always better than TCP for live streams. UDP multicast is even better (especially over 802.11). This way (example) my wife can watch the broadcast on her PC if she wants to, and I can watch it at the same time, while using only 1x the bandwidth. When you use 802.11a, this adds up quick if your stream is 700k to each user vs 1x700k to everyone. You need to install windows media server for this, and your HTPC would have to be running win2k server or .net server, or NT4 server.
There are 10000 ways to skin a streaming cat, but windows media is probably the simplest (and free) to setup, and provides decent reliability and compression vs quality ratios.