Use my server for a media player?

I currently have a very basic SBS 2003 server using the following hardware:
Coolermaster Elite case with Phobya G-Silent fan
Corsair HX400 PSU
Biostar MCP6PB M2+ MB
AMD X2 3800 with Zalman CNPS10x Flex (no fans)
2gb pc5300
160GB 2.5" Hard Disk
DVD/CDRW Combo drive

It sits in my living room and runs silent due to the low speed fan and passive CPU cooler (temps about 40c).

At present, if I connect it to my 46" Plasma via VGA, I can only get a 4:3 output, so at the moment it's no good as a media player.

I am considering adding a cheap HDMI graphics card that can handle HD content, and occasionally watching my collection of films that I have encoded from my DVDs to MP4 using Handbrake. At the moment, I watch them on my 24" screen on my main PC, but just had the idea as the server is in the living room right next to the TV anyway.

I will probably run XBMC on it (as apparently this works with Win 2K3).

So would playing video content add much extra strain to the CPU causing it to get hot? At the mo it is simply running SBS to allow me to have Exchange handling all my emails, DHCP, DNS thats it.

And what is the most basic GPU that has an HDMI and can handle 1080p?

If you get the right card (darn near any now) that load is held by the GPU, not CPU so temps shouldnt go up much if it all on the CPU.

I am a fan of AMD/ATI so is it worth going for a 5xxx series or would one of the older 4xxxx series cards be worth the saving?

It would need to be a passive card to keep noise down.

Any card with onboard video processing will do. This includes the 4 series.

The card would also need to be able to output sound from the onboard soundcard too - not sure how that works though....

Something like: http://uk.asus.com/product.aspx?P_ID=IRGVEYFrTg2c3LEs&templete=2 ?

Bought this: http://eu.msi.com/index.php?func=proddesc&maincat_no=130&prod_no=1822 for £30

Cool beans!

There is an edit button available so you dont have to triple post...

Card arrived today - all fitted, a bugger to get the drivers to work under W2003 and output audio and picture via HDMI, but got it sorted.

However, although it has taken a load off of the CPU, there is still about 14% being used by XBMC. Would this be just having XBMC loaded, or is there something I can do to force the GPU to process instead?

Final Spec:
Biostar MCP6PB M2+ motherboard
AMD 64 X2 3800+ CPU
2GB Kingston PC5300 RAM module
Zalman CNPS10x Flex cooler (passive)
Corsair CX400w PSU
Phobya G-Silent 1500 exhaust fan (which I had just won in a competition) (controlled via SpeedFan)
Scythe Kaze Slim intake fan (set to 800rpm via a Zalman FanMate)
160GB 2.5" Boot & OS Disk
1TB 3.5" Data / Backup Disk in a Scyte Quiet Drive (from my other build)
MSI R4350 512MB Passive GPU (for watching videos on XBMC)

Here are some pics (first few were before the adition of the GPU):