Buy the laptop, build the HTPC.
If you have the parts for six “sort-of” Pentium 3s then you can build one machine, with the additional purchase of a TV card or something, and it’ll ultimately cost you much less. A machine like that, with the proper programs, will be able to record any input (and thus have the necessary properties of a PVR) and handle all video play other than really high-def stuff.
Terra is just an Athlon XP2200+ with an X700 and I can play anything on my TV up to 480 high-defintion.