Architecture Intro
LinuxMCE is divided in two parts: the core (aka the backend) and the media director (aka the frontend).
The core
The Core has no user interface (unless it is a hybrid). It provides services throughout the home, like the phone system, the central database cataloging all your media, message routing and net boot images for all the media stations. You can only have one Core in the house because it is the central point through which all the devices connect. Your Core should generally be left on all the time because if it's ever turned off, all the LinuxMCE functionality everywhere in the home stops working.
Media Directors
Wherever you have a TV you have a Media Director, which is just a PC running LinuxMCE. Generally you do not need to install any software on the Media Directors, because one of the services the Core provides is netboot. This is a feature that almost all PC's have. Through the BIOS setup on any PC, turn on the netboot as the first bootup device. When this setting is chosen and the PC is rebooted, the PC will search the network for a boot image and boots that image as its OS, rather than the OS on the hard drive. In a LinuxMCE network, the Core provides the boot image over the network. The PC that will act as a Media Director acts essentially as a thin client to the Core. This makes it extremely convenient. You can leave Windows, Fedora, or any other operating system you want on your PC's hard drive. When you want to use that PC as a LinuxMCE Media Director, all you do is enable netboot in the BIOS. When you want to use the OS that is stored on that PC's hard drive, you simply reset the BIOS so that the hard drive is again the first boot device. (You can't do both at the same time using netboot. It's one or the other.) A great benefit is that the LinuxMCE software will never interfere with the software or operating system on the hard drive; it's like having 2 systems in one. It also means you only have to install LinuxMCE software on one PC, the Core, and you can have thin client LinuxMCE Media Stations throughout the house. The whole process is fully automated and completely plug and play (it doesn't matter if you don't understand what netboot is all about). The only technical thing you need to do is turn on netboot in the BIOS of any PC you want to use as a Media Director. Your PC manufacturer instructions will tell you how to change the BIOS settings.
A common way to install LinuxMCE is to also install the Media Director software on the same PC that will function as the Core. This is known as a hybrid. In this situation you can use the Core as a Media Director as well, which can be a standalone PC solution. You can still add other Media Directors later on, using the same netboot method described above. A hybrid, like a standalone Core, will provide boot images across a network. The UI (user interface) on all Media Directors looks exactly the same as the UI on the hybrid Core/Media Director. You can't actually tell the difference between the Media Director on the core and a net boot Media Director. But remember, don't turn off the hybrid either, since it is acting as a Core. If you do, all the other Media Directors will stop working.
LinuxMCE and DHCP
Another important thing to know about LinuxMCE is that it is fairly important that within your LinuxMCE home automation/multimedia network, the Core must be be the DHCP server. The DHCP server allocates IP addresses to all the devices in your home automation/multimedia network. Generally you can only have 1 DHCP server on your network, and in most cases you will already have a DHCP server run by your home router, or by your cable or DSL service provider. The easiest way around this is to have 2 network cards in the core. One connects to the cable or DSL modem and gets an IP address from the DHCP server of your home router, or your ISP provider. The other connects to your home automation/multimedia LAN (through a switch). All your other PC's and devices within your home automation/mulitmedia LAN connect to the switch and therefore use the Core's DHCP server. LinuxMCE's default installer recognizes this configuration automatically, and will automatically set everything up for you. This is recommended if you don't know about networking concepts.
If you only have 1 network card in your Core and your Internet service provider gives you a static IP, (and not a dynamic IP from their DHCP server), then this will also be fine.
If every PC and ethernet-connected device in your home will also be part of your home automation/multimedia network, then you can allow the Core to act as the router/DHCP server for your entire home LAN. In this case, you would disable the DHCP on your existing router (if any) and merely let the Core handle the DHCP functions.
If the Core does not provide DHCP functions to your home automation/multimedia network (and only uses a static IP for itself within that network), it will not be able to recognize plug and play devices or to provide netboot images to additional Media Directors. If your entire LinuxMCE will consist of a single PC configured as a hybrid, that would be acceptable. But to take advantage of the network capabilities of LinuxMCE, the Core must be enabled to provide DHCP functions.
The Usage Intro explains the concepts about how to use LinuxMCE.