I just put OpenElec on a spare box I had. Smaller form factor, meaning I can put it in the bookcase (but its not MicroITX or anything super tiny). Anyway, you mentioned XBMC so Im going to suggest OpenElec to you once you get comfortable with XBMC, as it allows you to blow away all the unecessary Ubuntu stuff and just run XBMC pretty much standalone. Means you'll need to SSH in to administer it, but I've not had any need to do it at all.
Check it out. Mine is running on an AMD Athlon 3400+ single core with 1.5Gig RAM and an HD5450 video card, HDMI out to the TV. Super quite, and cost me $50 total (I bought the video card, rest I just had kicking around). Plays video from the local network.