TV as a monitor?

That appears to be a video capture card. It won't give you graphics output without a graphics card...

 

You could put an apple 5770 video card in it, and then use a minport adapter to get it to HDMI. You would need an adapter like this:

http://eshop.macsales.com/item/Newer Technology/CBLMDPHDMI/

 

How are you going to control the computer from the living room?

 

One thing I read about a TV being used for a monitor is a slight delay for response time is slower due to oversampling - I can not remember the article but someone may know more info

 

There is an entire thread devoted to using the 5770 in early mac pros here:

http://forums.macrumors.com/showthread.php?t=1002692

I just glanced at the thread, and it appears that most 2006 mac pros are compatible with the 5770. However, it seems to depend on the firmware on the Mac Pros motherboard.

 

Maybe you should just get an AppleTV?

 

This actually is not a bad suggestion. It will sync with your Itune library, and stream everything to your TV. The apple Tv is only $99, and the video card for the Mac Pro would be around $250.

 

I use handbrake to transfer my DVD's. I transfer them over to m4v or mp4 files with the bitrate set at 1000 kbps. I don't know how that would compare to raw TS files. My movies typically run 1.2 to 1.7 gb in size, and they look ok on my 42" TV. I don't know if Itunes can deal with raw TS files.