Bro,
thanks for the reply.
I dont mind intel of AMD....most importantly is the cost...
Zotac is quite on the high side (in term of price), right?
I was thinking MSI or anything equivalent, but not sure whether it is available or not....
so far if found nothing when searching here...

Mirco-ITX is a good idea. But considering the size....hahaha..so malas one lah... 
Found this Intel DG41MJ at ~RM300....
i'm still researching on it..

Found this review...http://www.silentpcreview.com/article960-page7.html

Conclusion...
The Intel DG41MJ is very power efficient, and with the exception of an actual high bitrate H.264 encoded Blu-ray movie, plays most content with little difficulty. The chipsets run fairly cool, but the board's automated fan control system is a disappointment. It is too passive, letting the processor get too hot before kicking in, and once activated, it is not aggressive enough in the face of high CPU temperatures. It may be optimized for use with Intel's stock heatsink/fan, or another HSF that has higher native speed than the fans we tested with. It is probably best to disable it if you plan to stress the system on a regular basis.

The DG45FC is equally power efficient, but its video decoding ability is superior. In addition, it offers a bevy of features including HDMI, S/PDIF, RAID, eSATA, an extra SATA port, and a PCI-E 1x slot instead of PCI. Not everyone needs these extra features, but in particular, digital audio and video outputs are essential for the most common application of mini-ITX systems: Home theater PC. Between the two, we would choose the DG41MJ only if cost was a major issue because the DG45FC can be had for only $25~$30 more. (It should be noted that both Intel boards only support processors rated 65W or lower.)
This one tested with Intel Core 2 Duo E7200 processor - 2.53GHz, 45nm, 65W

total price still almost the same with board with dual atom ION...

So in short minimum we need,

1. HTPC (i3 + h33, ram & HDD & etc of coz)
2. decent Display card like ATI 5XXX (with HDMI)
3. Blue Ray drive
4. AVR capable to do TrueHD/DTS-HD
5. Software (MPC-HC and FFdshow with appropriate codec)
6. 5.1 or 7.1 speaker set depends on budget  (or re-use existing old spk if got)
7. Full HD TV (or HD ready then 720p only)

Then we will enjoy, lossless sound + FullHD movie? Kindly advice. TQ.

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Added on March 24, 2010, 3:49 pmwith BD buying from Amazon.

If you are not into game, i3+h55 is enough. No need to buy ATI 5xxx.

IMHO, KL series is tower case... I wouldn't want that for my HTPC. I will always go for the sleekness of LC series and it's in desktop form.

I'm still trying to look for this

guys how low specs a htpc can be ? as i will be using it to watch movies on my pc via wifi.

i need a decent processor than can perform well when i watch via network. but im not sure how decent is enough?
i will run it on windows 7 and pair it up with 2gb ram, low end graphic card and small hdd.

i prefer pc than a media player because it is upgradeable and better compatibility.