5. How do I connect my Satellite receiver to the PC, It would need an HDMI or component (component input would have to transpose to HDMI) and a coaxial input. This is the part I am having the most trouble with.
6. Software that would allow configuration, volume, time delay, and equalization of each speaker, codec’s to play the latest video files and support for the true audio formats.
I was waiting for #5. If you didn't list it, I was going to bring it up, but you did list it, and with a proper "trouble" label. I'll get the HDMI out of the way first. You're absolutely not going to find an HDMI input which has HDCP decoding. So you can stop you search for that one. So it comes down to component video. You can find a few high def component capture boards, but most are not designed for real time routing of video, let alone enabling any processing of the video. Really with satellite you're pretty much out of luck. With cable there are finally some CableCARD enabled tuners showing up which would allow you to plug the cable right into the back of the PC, but no such thing for satellite (although they had promised it years ago).
Windows 7 actually takes care of #6 for you now. That used to be a hard point too, but not any more.
I used to have this dream too. But I've given up on it now. My recommendation is get a receiver, and get nice, silent HTPC with a Blu-ray drive, and a video card which supports video and multi-channel PCM audio over HDMI. That way you can do all the PC stuff on the machine, but still the receiver handles the digital to analog conversion, room correction, pre-amplification, and driving the speakers (or get a pre-pro and the power amps you want).
