Raspbmc - Media Centre
The Raspberry Pi is suited for running the xbmc media server. A taylored image is available called raspbmc and this is what I used.
You can get it here http://www.raspbmc.com/ and it comes complete with an windows installer (tested here on XP and 7). You then boot up the pi and with a (wired) network connection it will download the required files and updates before presenting you with the interface.
I have tried installing such as iPlayer and it is fine. Playing local music is also good. I've also tried a few videos and these also play ok.
I wanted to access pi files via samba so set that up (ssh just works out of the box). I had a supported network dongle and set that up without too much trouble either.
All in all a very useable application of the Raspberry Pi.
1. Joining a wireless network - there is a standard screen for setting up wifi, but I couldnt get it to work. Google revealed the answer for me. Add a program add-on called Network Manager (programs > get more). Launch this program and it guides you through the process effortlessly.
2. iPlayer, 4OD etc - This site http://djb31st.co.uk/blog/catch-up-tv-on-raspberry-pi-raspbmc-bbc-iplayer/ guided me through adding catch up TV easily.