Seems like I'm getting not-so-gently shooed into the direction of building a media pc.
That isn't quite a bad idea. I myself have a Roku 1 XD|S and a Roku 2 XS - both of them play fine when just using flash drives of about 8-16gb. If I want some real entertainment, I either go to Netflix or Amazon. If I want a mix of local media playback, I have a gaming rig/workstation that connects directly to the TV. If you're interested about getting an HTPC in the near future, try reading through this review
for this HTPC. And no - I don't work for them and nor do I receive any compensation for mentioning their product(although somehow I wish I did
). Local media streaming is not roku's forte, but it's a feature that suits casual users. But that's just me, feel free to give your thoughts about this.