I actually second Bruno's suggestion of the WDTV Live. My friend just bought one and it's surprisingly capable for such a little, inexpensive box. No, it's not an MCE extender, but it'll do quite alot. Plus, if you pay for the $20 PlayOn software, it can stream Hulu (and will work with subscriptions, turning it into a DVR), stream Amazon VOD, Netflix, and other services. Pretty impressive.

I think a media center extender is fantastic mostly if you're interested in the ecosystem. For example, I'd love to have one powerful machine with 4-6 cablecard tuners in it as my main MCE box, then have an extender on several TVs, enabling multi-room viewing.

I don't have any basis for this assessment, but I gather that extenders are good with many of them pulling from one source, whereas the WDTV Live might work better for your friends' need to have one device pulling from multiple sources. I could be wrong about that aspect of the extender, though.

One last thing to mention: you mentioned "Windows Vista and Windows XP PCs with the media on." I may be wrong, but I think most XP installations did NOT come with Media Center (I know I specifically had a Media Center Edition of XP), and as such would not work with extenders. I think the WDTV Live would work with those computers though.