Want to use your Raspberry Pi as a 'one-for-all' home media system? Then load up XBMC distribution for the Raspberry Pi and you can!
Here's a short video giving an overview of XBMC media centre running flawlessly with the Raspberry Pi.
Here's another video running OpenELEC as an operating system, with XBMC. The idea behind OpenELEC is to allow people to use the Raspberry Pi as a media hub, just like a sky box or DVD player. This ones around 4 minutes long.