Personally I've got an old PC in a HT case and that's what I use. It works pretty well, although never to my expectations (mostly because of TV tuner issues). But I don't watch a lot of TV or video, so it's not a big deal.
You may want to look into a Slingbox:
Sling Media - Slingbox
I've never done any looking in to on them, so I have no idea what they're capable of or even what they do, really. It might be the reverse of what you're looking for, actually.
As far as DVI cable length goes, I'm pretty sure that it's not too much of an issue so long as you're not getting up over 60+ feet. It's a digital signal so it won't degrade as much over distance is say, S-Video or Component. I think.