I use a Mac Mini in the living room for audio, video, and web browsing. It is connected to the TV and the stereo. The Mini's iTunes music collection replaced our CD shuffle player. The Mini's screen saver is set to show photographs from Photos. I currently have about 9000 music tracks (over 1000 albums) in iTunes, and about 5000 photographs in Photos: usually I let the Mini pick them at random.
I use a Logitech Harmony Smart Control to control all the equipment. The remote talks to a hub that controls the equipment with IR signals, and can be controlled by a smartphone over WiFi.
A Mac Mini can drive a high-definition TV easily. The highest screen resolution of HD TVs is 1920 x 1080 pixels. The Mac supports "1080p" resolution. I chose a TV that would display true 1080p in "dot for dot" mode over an HDMI input. Sony and Sharp make models that will work. The best screen size depends on viewing distance: you have to sit pretty far back from a really big TV. LCD seems like the best bet: plasma TVs are cheaper but have problems with burn-in and get dimmer after a few years. Look for fast response (cuts down on ghosting).
Our TV is a Sharp LC46D64U, 46 inch.
With the HDTV, I got HD cable. Comcast swapped the boxes and charged us a few dollars extra per month. I also bought an "upscaling" (progressive scan) DVD player (Sony). These are not expensive, and DVDs look very good.
The audio output from the TV is sent to a stereo receiver that runs our speakers.
Our computer is an Intel Mac Mini, bought in 2012. It is currently running OS X 10.10.5 (Yosemite). It came with 8GB of memory and a 750GB hard drive.
The Mini is connected to the TV with an HDMI cable. The TV is configured to show the computer's output in "dot for dot" mode.
The Mini's audio output is connected to the stereo with a standard miniplug to RCA audio cable.
The Mini has a Bluetooth wireless mouse and a wired backlit keyboard (a wireless keyboard kept disconnecting).
The Mini's built-in WiFi connects to our AirPort base station, so it has access to the Internet, and I can surf the web, stream Netflix movies, etc. from the couch. It is also useful for client presentations.
The computer is set up as follows:
I add picture files to Photos using the Import function. I use the full resolution versions of these pictures and let Photos downscale them, rather than trying to shrink them to the screen resolution. I adjust each picture to make it look good on the TV, cropping it to HDTV proportions if possible in order to avoid black bars on the sides, and adjusting the exposure, saturation, noise, definition, and sharpness.
To view pictures, I use the remote to switch the TV's input to the Mini and let the screensaver kick in. If I want to see a particular set of pictures, I can cause Photos to display a slide show from an album. The OS X screensaver has a number of cute modes, but I find that tricky transitions between photos get tiresome after a short while. I patched the system so that the screensaver photos stay up for 30 seconds instead of 3.
I add music tracks to iTunes by ripping CDs or vinyl, or by buying music online. I defined several playlists with different groups of music tracks. To play music at random, I set up a playlist of chosen songs, click in iTunes, and then activate the "shuffle" icon.
I found a good article by Matt Neuburg on TidBits.com that explains the basic steps to import music from vinyl LPs. I use the Mini to record audio from my old turntable, using an ARTCessories USB Phono Plus v2 preamp box to convert analog to digital and send it to the Mac via USB. On the Mini I use the free software Audacity to capture the audio stream, clean up the data, and create MP3 files I can put into iTunes. El Capitan's built-in audio driver works fine.
The Mac will work as a DVD player using an Apple external optical drive. It doesn't seem to be as sharp as the upscaling dedicated DVD player though. It would be possible to copy the content of a DVD to the hard drive, but unless you crack the copy protection, it won't play. (Haven't tried this.)
We stream movies from Netflix onto the big TV. Open Netflix in a web browser, pick a movie, and clickand then . This works OK. Stutters, failures, and "buffering" pauses are rare (our cable internet connection is 30Mb down). We got rid of Netflix streaming for a couple of years when they raised the price: not enough movies we liked were streamable to make it worth while. Later we reinstated it and cut our cable plan back radically.
(10/21/15) Netflix streaming via Firefox stopped working for us. A movie would play for a while and then stop with a spinning red ring. This may have been due to problems with Yosemite versus Microsoft Silverlight. (It wasn't the network connection, or WiFi, both of which worked fine for other devices.) I tried the usual fixes, reinstalled Sliverlight, restarted things, to no avail. Then I switched to Google Chrome, and movie streaming was fine. Chrome and Safari use HTML5 streaming and don't need Silverlight; I think this is what fixed it.
We started with Comcast cable. The packages available were either very expensive with lots of channels we never watched, or much less expensive but with only a few channels. (Where we live, we can only get three channels over the air, and there's only one cable TV provider.) When we cut back to a basic cable subscription, we missed sports and old movies.
I signed up for a trial subscription to Sling TV. I installed an application on the Mac that gave us over 20 channels, including ESPN and TBS for sports, and several movie channels including IFC and Sundance. I didn't continue with Sling when the trial ran out. Some of the issues we had were:
There are pirate web sites that promise to stream sports events and movies, ignoring US copyrght restrictions. It is probably a bad idea to use these sites: some of the sites demand that you disable ad blockers, and then blast your browser with pop-up windows that are hard to get rid of, advertising gambling and fantasy football sites. Other pirate sites will tell you your Flash plugin needs to be updated, and if you click on their buttons, install malware. Sites vanish when enforcement actions take them down; often they reappear with slightly different names.
The Mini appears on our local network via its WiFi connection. The other Macs in the house can connect to its file system and move files to and from the Mini. The other Macs can also start Screen Sharing and see the Mini's screen, drive its mouse cursor, and type into applications. It is also possible to open shell windows and execute single commands on the Mini using ssh from a local computer.
The Apple Remote app on an iPhone or iPad will cause iTunes to skip to a new song, change volume, etc. -- when it works. (The iPhone or iPad must be on the same wireless network as the Mac running iTunes; if the home router exposes a "guest" network, the Mac and the wireless device must both be connected to it, or both must be connected to the main network.)
I have not installed much Non-Apple software on the Mini: Firefox, Emacs, Audacity.
An AppleTV (I haven't tried one) will do more or less the same as the Mini setup described above. It also lets you subscribe to a lot of streaming services, some requiring additional fees. An AppleTV connects via WiFi to your home router and to other Macs on your network. It will show your pictures stored in iCloud or in the iTunes library of a computer on your network. The AppleTV will store 1000 photos, in case your router can't connect to the Internet.
There are rumors that Apple will sell a TV service package in 2016 that includes about 25 channels, including broadcast channels and live sports.
There are other streaming video sources besides Netflix and Sling, if you have a high-speed Internet connection. Amazon Prime and Roku seem to be oriented toward current popular movies and TV series. Hulu interpolates ads into the movies, even if you pay for a subscription. There is also Apple iTunes video streaming.
There is a port of Xbox Media Center, called Kodi, for the Mac. It seems to be oriented toward playing movies from the Mac, but it does have music and picture display abilities. It's free.
VLC is another music and video player for the Mac. It plays many audio and video formats. It's free.
I think there are analogues for all of this on Windows PCs, but I have not investigated. I did hear that "Windows Media Center" is being discontinued by Microsoft.