Today (October 12th) is the day that Windows Media Center 2005 is launched.  There's bound to be a lot of press about what's new in this version, but here's a summary of the highlights...

Television

• HDTV support.  Media Center now supports recording HDTV from over-the-air (OTA) sources.
• Multiple tuners.  There's now support for two tuners in a system so you can record two programs at once and watch something live while recording a second show.
• Picture quality.  There have been improvement made to the quality of the picture when watching TV.
• Movies portal.  There's now an easier way to find out what movies are showing soon.  The movies portal lets you browse movies visually using the cover image of a movie plus you can view more information on the movie such as cast and crew, reviews and synopsis.  In addition you can browse from category to category - find a movie you like, look at the cast, select an actor and then look at the other movies they've been in.

Pictures

• Camera support.  Connect a WIA (Windows Image Acquisition) compatible camera and Media Center will notice it and provide an interface for downloading the pictures.

Videos

• ASX support.  Media Center will now play playlists of videos.
• Better playback performance.  Previously when watching a video over the internet Media Center had to download the whole file before playing it, now it will start playing it as soon as it can which makes watching internet based video much better.

Start Page and User Interface

• Most Recently Used (MRU) for each experience.  Each experience on the Start Page now has an MRU that appears when the button gets the focus.  For Music this will display the last three items played (i.e. an album, an artist, a playlist), for TV it displays links directly to Recorded TV, Live TV and the Movies portal.
• Power Button.  The minimize, maximize and close buttons have been replaced with a single power button which when clicked presents a number of options such as close, standby, shutdown, restart and log off.
• Context Menu.  Throughout Media Center there's now support for a context menu.  Press the "more info" button on your remote to display the context menu - this will provide more options for whatever is currently selected.

CD and DVD Burning

• Media Center now has built in support for burning media to CD and DVD.

Extenders

• Extender devices are set top boxes that connect to a TV and let you use Media Center remotely.  Multiple people can now use a single Media Center PC at the same time in different locations around your home.  You might have the Media Center PC in your home office, an Extender in the living room and perhaps the kids have an Extender for their Xbox as well...

Online Spotlight

• There's a new Online Spotlight with new applications.  I'll post about the new apps at a later date.

Developers

• Add-ins.  Add-ins are small managed code applications that run inside Media Center.  They have access to the same API as HTML pages plus the full .NET framework (1.0 only). 
  • Add-ins can run in the background all the time to provide notifications.
  • Add-ins can run on-demand to perform a specific task (such as uploading a photo to a website).
• New APIs.  There are new APIs in this release for using the Parental Controls, displaying the new style dialogs and a few other things.
• New entrypoints.  Applications (HTML and add-ins) are no longer restricted to being started just from More Programs.  Now you can place your application in places throughout Media Center:
  • More With This.  The More With This (MWT) class of entrypoints are available in each of the different experiences in a number of categories.  When using a MWT entrypoint the application has access to the "context" at the time of the application starting.  For example, the user can start an application by bringing up the context menu on a photo, selecting "More..." from the menu and then selecting your application.  Your application will have access to the specific photo and can perform an action on it - i.e. upload to a website. 
  • New For Me.  Does your application have something new?  Perhaps the movie the user wanted has finished downloading.  Submit a New For Me (NFM) and the user will know next time they go to More Programs that your application has something new for them.  In addition if you have something new for the user you can use the NFM entrypoint to take the user to a different place in your application - for example in More Programs clicking your icon might normally take the user to the front page of your application - but when you have new content you navigate the user directly to your "new items" page.
  • Services.  Each experience can now have a button that will display a page similar to More Programs, so if your application is specific to photos you can register your application to appear in the "More Photos" page.
• New SDK.  You can get the new SDK soon from here.

I think that's everything.  I'm sure I've missed something though.  Later today I'll post some code for an example Add-in so you can get started writing some cool new apps :)

Part two (because I missed some things).