Okay....first off, I am running my Myth box on a P-III 933 Mhz, with 512 MB RAM and a 60GB HDD. It was my main computer before I bought another one about a year ago. I did nothing to it except to install an ATI-AIW video card, which was in an even older system I had. I could have bought or built a similar system in the $300-$400 range. There is no need for anything fancy. The only 'must-have's' are the A/V in/out capable video card, and a minimum P-III processor or any other processor that isn't chopped.
The Myth box becomes your programming source. In essence, it gets all of it's info from your cable or satellite tuner, but it takes over all functionality. The guide, programming, info, etc is taken from your tuner and incorporated into the Myth system, and will therefore be run completely by the Myth system. When you watch TV, your interface will be the Myth system and not the cable or sat tuner.
Points taken on the cost of components.
Not to belabor the point - but say I have cable. The cable comes out of the wall and into the digital STB. What comes out of the STB is up to me - it could be component video/audio, it could be HDMI, it could be S-video. OK. But let's say we take it out as coax. Correct me if I'm wrong but I would have thought that the channel selection has already occurred after leaving the STB and what comes out of the STB is not a multiplex of 999 channels but a single channel that can be displayed by a display device. So how does the MythTV do the channel selection that it must do to serve its recording function?