XBMC questions on build

Looking at adding an XBMC with a nettop.

Objective:

I am sick and tired of not being able to play TV shows and movies without having to fumble through discs, put them in my Oppo player, wait minutes for some of the blurays to even get to the menu screen.

I want to correct this via a HTPC with a slick GUI, easy to use, is silent from the listening position and the ability to play both high resolution video but also audio as well while working with my universal remote.

Existing infrastructure and hardware:

Hard wired gigabit whole home network.

Older P4 HP with 2GB RAM and lots of storage(JBOD). This is running my Squeezebox server, and I will be using this as the storage for the bluray rips. Runs Windows 7 Ultimate 64bit.

Custom built gaming PC. I will be doing the rips from this machine to my storage box.

Harmony One remote and home theater with high end receiver capable of decoding high resolution audio.


Proposed hardware purchases:

With the above objective, I believe the AspireRevo AR3700-U3002 fits the bill, minus the remote control.

With this model of nettop, does it run XBMC in Windows 7 fine, or is there slow down and the better option is to install the Live XBMC directly onto the hard drive?

If XBMC will run smooth as an app inside Windows 7, then what would the best bang for the buck USB IR dongle to buy that will work with my Harmony remote?

Also, the same question if you need a different one for using XBMC as a local install on the hard drive, not as the Windows app.