If it turns out to be the best solution for me then I don't see any reason not to instal linux on the HTPC.
will there be any problems being networked and running stuff from a windows pc?
Networking wise, certainly not, Linux has full support for pretty much all network protocols (TCP/IP, both IPv4 and IPv6, PPP, SLIP
blah, blah). Wireless networking can be tricky at times due to the chip manufacturer's refusal to release chip specs, but this is getting less of a problem, and if really comes down to it you can use ndiswrapper to use the windows drivers (although this isn't really a worry, since your likely to use cabled connections).
As for running "stuff" from windows, thats territory I've not experience of for media center's as I haven't got one myself, it kind of depends what you want to do. Something like MythTV seems to use a frontend that runs under Linux as well. One thing you
will be able to do is use
Cygwin/X to get a 'remote' graphical login over SSH to a linux box from under windows (Cygwin is a *NIX shell for windows). You can also use
PuTTY to get a CLI login over SSH. You
might be able to get the MythTV frontend running under Cygwin/X on a windows machine, but its not something I've tried or read about (although in theory since Cygwin provides a complete *NIX shell it should be possible).
