A Home Theater Personal Computer, or HTPC, is a computer dedicated to watching, and sometimes recording, video and audio. It's used as a replacement for or supplement to a DVD player, VCR, and sometimes cable or satellite receiver.
There are many different programs designed to make a HTPC from a regular PC. These range from completely free solutions like MythTV, which also runs on a free operating system (Linux) to the all-in-one operating system and HTPC package of Windows Media Center Edition (Windows MCE). Special hardware, in the form of PCI cards or external USB or FireWire devices is generally used, and you can also buy computer cases that make a computer look like an AV component.
You can even buy pre-configured HTPC computers that include the operating system, all required recording and playback hardware, and HTPC software.
