My Hauppage card has an onboard encoder/decoder so most of the rendering should be done "on card", I've heard of plenty of people running a decent PVR on a 500mhz cpu with 512mb ram so I'm not sure about the 2gb you've heard of.
If you think about it though, I'll have 2 SVid out (Video card, hauppage, and the addon card for the hauppage) and several in (hauppage, addon as well) so I can have some fun there as well
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My first testing will be on the video output of the hauppage vs the video card, seeing if it only works when the card is enabled in the OS or if it's always on, and which gives a better/cleaner picture...