Before we begin you will need:
A) A pc connected to your tv. A lowpower netbook-like pc is fine as long as it has a video card that can accelerate flash and hd video. A Media Center remote will be helpful as well.
B) About $200 to buy a separate proprietary box. (Boxee Box)
Option A is what I'm talking about today since I've never used a Boxee Box personally, but it's a valid option if you don't have a pc for under your tv or don't care to build one.
XBMC and Boxee are very similar pieces of software. Boxee is actually based off of XBMC. Boxee uses the bas of an older than current version of XBMC and tries to add social networking features to it.
Above is a photo of the main menu for Boxee. As you can see there is a Friends section, a queue for watching later, a tv shows section, a section for movies, an apps section for using addons, and a file system browser. Boxee works pretty well for using a remote to interact with your pc and watch videos, but the sections above, at least for me personally, don't work very well for my needs. First problem, the queue (watch later).
The "watch later" section works well enough for a reminder section if you have so much content that you don't remember what you have, but there's one glaring flaw: there is no playlist feature to watch shows back-to-back without having to pick up the remote. Even for music, which the mockup picture posted above doesn't show a section for, doesn't have an editable playlist feature for listening to music. Fortunatly Boxee is at least smart enough to play a whole folder when you start a song from it instead of just one song and stopping.
Next problem: the TV and Movie sections. These sections try to do something good by showing you a browsable menu of boxart and pictures to better identify your video files. The problem comes in when you don't name your files to an exact specification. There have been quite a few times where I've gone to start a kids movie and the boxart is some random horror film like Willard or the Shining. Because of various problems with the fancy boxart browsing attempt that these sections use I mainly stick to the file browser. You can also view streaming video through the TV section, but this is hit and miss. Since HULU has blocked Boxee and started charging fees for most of their content, a lot of the browsable streaming video through this section is either blocked or a short preview.
The file menu works well enough. You can put shortcuts to various folders at the root so you don't have to keep clicking and clicking to find your files. All you have to do is use the arrow keys on your remote to highlight a file and click ok a couple of times to start playing.
Apps: These are what make Boxee more than just a fancy file browser. With various addon apps that you can browse and install right from within Boxee you can view videos from various websites like PBS, Youtube, Clicker, etc. Very convenient. One of the better addons is VUDU. This is a pay per view and/or pay to purchase streaming video service. I've used it a few times and, other than some idiosycrasies with volume levels and inability to stream HD video the last time I looked (though widescreen video is still doable thankfully) it works pretty well.
XBMC:
Recently I've started to play with XBMC instead of Boxee. Boxee works great, but so far it seems like they've almost abandoned their PC software since their Boxee Box set-top device was released.
XBMC has all of the features that Boxee has minus the social networking stuff that doesn't seem practical anyway so I won't go into specifics unless necessary. There are a few advantages to XBMC though.
1. Updated more frequently
2. Better video codec support
3. More addons
With XBMC you have the option to pick your own themes or create your own. There are also more addons to choose from since XBMC has been around a lot longer. I've also noticed that any of the videos that I had a problem with in Boxee work just fine in XBMC version 10. The only things you lose out on with XBMC are social networking features (useless) and some streaming video integration. HULU wont work at all in XBMC (at least that I'm aware of) compared to partial function in Boxee. There are a few other built-in streaming sites in Boxee that I haven't found replacements for in XBMC, though this doesn't necessarily mean they aren't there. I may just not have found them yet. Only other small problem I've found is that my remote doesn't seem to work quite as well in XBMC. One major problem, at least for me, is that you can't use the arrow keys to choose letters from an onscreen keyboard in XBMC like you can in Boxee. This might be a dealbreaker for me at some point.
Conclusion: XBMC is better "under the hood" for most things, but Boxee, in general, has a better user interface and integration with a media center remote. Ideally I would like to see Boxee update itself based on the newest release of XBMC and possibly remove the social networking features. Buy the Boxee Box if you just want to stream content from online and from your file server located in some other room: Boxee Box by D-Link
