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Yep runs 1080p absolutely fine! You need a very lightweight theme without many animations though.

I used one of my many old internal PC hard drives and bought a £10 case to convert it to USB.

Is there a good forum/site with information with notes on what does and doesn't work for different setups, settings, themes, etc.?

edit: Nevermind, I saw your post below and realized that OpenELEC is a full on media center distro. Thanks!!