Excellent post, andrejkw, many thanks.
My 2009 4-core Mac Pro uses a modest, yet very capable, EVGA nVidia GT430 1TB HDMI/VGA/DVI graphics card, which can be found used for $30-45. Performance in an HTPC application is excellent, using an HDMI cable.
I'm using OS Mountain Lion 10.8.4. It works perfectly, with the 4,1 firmware upgraded to 5,1, though it works fine with 4,1 also. 5,1 will allow use of 1333MHz RAM, if needed, though the stock 1066MHz RAM is fine for the job.
Adding a $50 internal Blu-Ray reader/burner in place of the stock Superdrive is a 10 minute job, making for a fine HTPC rig, much cheaper than a loaded MacMini with similar specifications.
I agree. The 4,1 and 5,1 are still very capable machines. They can also be improved by a simple upgrade of the Xeon CPUs.