Mark asks, "I have my home PC in one room and my TV in another (same floor of the house). What is the best way to connect the two (to watch movies off of the PC)? Is there a distance limitation with any of these alternatives? In their current locations I would need to run about 25 feet."
In theory, you could run video out from your PC to the TV using some cables, although a 25-foot run of RCA or S-Video will likely weaken the signal and/or create a bunch of noise in the line. A better option is to invest in hardware designed to stream video from your PC to your TV. This does require using wireless routing for transfer of the video signal, but 802.11g hardware is very cheap at this point.
A bunch of companies are currently making hardware they claim will stream media from your PC to your home theater. The only solutions that work well are the Windows XP Media Center Extenders and the Windows Media Connect compatible devices. The rest of the proprietary options offer solid audio streaming and flaky video streaming at this point. One option is to upgrade your PC to Windows XP Media Center Edition and invest in a compatible Windows Media Center Extender. The second option is to purchase a Windows Media Connect compatible device.
Xbox or Xbox 360
If you already own an Xbox or if you plan on getting an Xbox 360, you're most of the way to having what you need. The current Xbox acts as a Windows Media Center Extender with an add-on package. This requires you to have Windows Media Center but is a viable alternative.
Xbox 360 is an even better option. If you have Windows Media Center Edition, Xbox 360 acts as a Media Center Extender automatically. Without Media Center, Xbox 360 acts as a Windows Media Connect device capable of streaming your audio and video content from a PC. This is all done over wireless, so as long as the room with the TV gets a solid wireless connection, you can stream media from your PC all day long. The rub here is the Xbox 360 isn't available until November 22, 2005 in the United States (later elsewhere).
The D-Link MediaLounge is the only other hardware solution I recommend at this point. MediaLounge supports streaming of MPEG-1, MPEG-2, MPEG-4, AVI and XviD format videos, which covers most streaming options. It also acts as a photo browser and streams music from services like Rhapsody and Napster. MediaLounge uses 802.11g to stream, has both component video and digital audio output for optimal television integration and switches between PAL and NTSC. The hardware is firmware upgradeable and has received a few feature enhancements since appearing on the market.
If you're really into hacking your media, you can create a low power UHF station in your house by outputting the audio and video from your PC to a UHF transmitter. With the help of a Bluetooth remote like Sailing Clicker to control the PC, simply tune in the video output of your PC on the appropriate UHF station and you're in business. The hard part here is keeping the signal at a low enough strength to avoid a visit from the FCC.