Welcome to the forums.
In order to get the most out of them it's always a good idea to give as much information as possible. Not everyone, for instance, is familiar with your TV. I, for one, don't know if it's a CRT, TFT or Rear Projection. I'm guessing at CRT.
You probably know if it has component input, I don't. I'll assume the best you have in the way of quality attachments is RGB Scart.
In that case I suggest you buy an ATI graphics card and either build, or buy ready made, the VGA to Scart cable mentioned in the main computer forum.
This will give truly excellent pictures for desktop and movie watching. It is ideally suited to the MCE experience, it does only work with the ATI cards though.
Dave