i have just finished building my home theater pc, i'm using media centre on vista 64, with a decent TV tuner there is no reaons why you can record TV etc, also you should be able to pickup foxtel aswell.
i'm running an AMD 7750, with an asus mboard which has HDMI out 7.1 sound built in blah blah, have 4gig of ram 1TB of disk drive at the moment that will increase to 4TB, and a thermaltake d101 case. for me this works really well and the advantage of media centre is that you can use an xbox 360 as a media extenda which means the home theatre pc can hooked up to the big tv and the xbox to something else and two people can watch movies tv etc. my build cost me about $850 but that includes power supply DVD drive etc.