Old TV, New HTPC?

I just bought a house and the previous owners left behind an old TV and it seems a waste to just ditch it (not to mention it'd probably cost money due to hazmat rules). 

The TV is an old non-HDTV plasma model (specifically a Zenith P42W46X @ 852x480p). Given that it's not HDTV, you can probably guess that it doesn't have an HDMI input either but it does have DVI. 

My plan is to buy a simple HTPC like an Acer Revo, Zotac zbox, or (more likely) a cheaper equivalent. Based on the specs published at newegg and/or amazon it appears that many of these only have HDMI so I might have to get a DVI-HDMI converter cable but they seem to be readily available if necessary. 

So, that leaves three questions:
1) any reason this won't work?
2) assuming it will work, any challenges I should expect?
3) any suggestions for the HTPC? 

Note regarding #3, I'm very limited on space so the ultra-tiny "book-size" models are pretty much required thus eliminating any custom builds (my normal approach to new PCs). 

Thanks

If it has a component video input, get a 1st generation Apple TV and a crystalHD card. Install the crystalHD card like the guy in this video. Then buy a 4GB USB flash drive, download crystalbuntu for free, and install it on your Apple TV like this guy. Enjoy.

hmmm... I'll have to think about that. I had been planning on a windows install so I could stream Netflix but this would shave quite a bit off the price tag. I could walk to the living room to watch Netflix...

just may be the ticket if I can't find a windows solution that will work. Thanks.

I see no reason why this wouldn't work. Just make sure the GPU supports that resolution (which most should).

I used a DVI to HDMI cable for a long time (paired with an audio cable obviously) and it worked great.