Well if you want the best picture and pvr capabilities go with a hauppage pvr-150, or pvr-500 for dual tuner support (good luck finding the 500) and for a video card I suggest any nvidia 6600/6800. That should provide you with the state-of-the-art without breaking the bank. And will be a much better option than the AIW 9800. Or if you wanted to wait ATI is coming out with a new tv tuner, the TV Woder Elite, using their new Theater 550 Pro chip. Heres the link http://www.ati.com/companyinfo/press/2005/4810.html.
And if you really want the best DVD picture quality I would not even use MCE05 but zoom player pro or theatertek with dscaler and ffdshow which is far superior. If that sounds like greek the check out www.htpcnews.com or www.avsforum.com.
FYI after upgrading to MCE05 and using hacked drivers with the AIW 9000 LP I had no problems with lockups and much improved performance. And extenders worked fine with it.