Ok,
I lied. Actually I should just have been more clear. It can do at least 720p.
1080p was not tested and therefore not included under what it can handle. I
think we can safely add 1020p to the list. I can't discern any loss in
quality.
We were looking at the most recent Intel Atom initially which if I recall
correctly claims to support HD. We never got a board as we found out it
requires a non-free component.
Then we were looking at using a broadcom crystalhd decoder card. Again
assuming I recall correctly the drivers were free although not the firmware.
:)
AMD doesn't offer a free software compatible solution either.
This actually works much better than I anticipated initially. We didn't have
to underclock the CPU or add any additional fans even. After a two day
marathon of testing it never got warm let alone hot. The CPU runs slightly
warmer than someone aiming for a very 'cool' setup might like although
nothing outside specifications. It actually is perfect given the space
limitations. I'm also sure if we used non-stock thermal paste it would come
down too.
Interestingly we also streamed over an 802.11G USB connection during the
testing. It is amazing how well it works considering. The only major upgrade
we really had to do was get the office of a poky 1.5Mbps connection. We now
have 10Mbps.