Today , I was playing with geexbox , a 20MB distro specifically built for converting your PC into a powerful multimedia centre. GeeXBoX is based on Debian, it works very well on any x86 PC. Addional images are available for 64 bit architectures and PowerPC. It recognizes a large number of hardware and supports almost any audio / video or images, as well as we can playback CDs, DVDs etc.
Here are some screen shots .
The start-up screen
There are scripts to remaster the image with your own video/audio embeded with in the cd. I am yet to try them out.