LinuxMCE is divided in two parts: the core (aka the backend) and the media station (aka the frontend).
The core has no user interface. 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.
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 stations because one of the services the core provides is what's called net boot. This is a seldom used feature that almost all PC's have. You need to go into the BIOS setup on any PC you want to use as a media director, turn on the net boot and make it higher in the boot priority. This means when you turn the PC on, before it boots up off the hard drive like it normally would, it asks on the network for a boot image, and will boot up off the core's hard drive, not its own. This makes it extremely convenient. You can leave Windows, Fedora, or any other operating system you want on your PC's hard drive, and when you want to use it as a LinuxMCE media director, all you do is enable net boot, and without installing any software, you have a media station. A great benefit is that the LinuxMCE software will never interfere with the software or operating system on the hard drive, so it's like having 2 systems in one. It also means you only have to install LinuxMCE software one time and one PC, the core, and you can have LinuxMCE media stations throughout the house. The whole process is fully automated and completely plug and play, so it doesn't matter if you don't understand what net boot is all about. The only technical thing you need to do is turn on net boot in the BIOS of any PC you want to use as a media director, and your PC manufacturer can explain how to do that.
The most common way to install LinuxMCE is to install the media director software on the same PC you install the core on. This means you can use the core as a media director, and you can thus have a single PC stand-alone solution. You can still add other media directors using the net boot described above, and the UI (user interface) on those media directors will look exactly the same as the UI on the core. They will have the same media catalog, the same UI, and so on, and you actually can't tell the difference between the media director on the core and a net boot media station. But remember, don't turn off the core, or all the other media directors will stop working.
LinuxMCE and DHCP
Another important thing to know about LinuxMCE is that it's fairly important that LinuxMCE be your DHCP server, which is what allocates IP addresses to all the devices in your home network. Generally you can only have 1 DHCP server on your network, and in most cases you will already have a DHCP server running in your cable or DSL modem. 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 its DHCP server, and the other connects to your home switch and all your other PC's connect to it and use the core's DHCP server. LinuxMCE's default installer recognizes this configuration automatically, and will automatically set everything up for you, so this is what's 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 DHCP server, then this will also be fine. Otherwise if you already have a DCHP server in your home, you will need to know how to configure it to disable DHCP and give your core a static IP address. Or, if you don't know how to do this, then just answer 'no' when the LinuxMCE installer asks if you want to run a DHCP server. However by doing this, LinuxMCE won't be able to provide net boot images to additional media stations, and most of the plug-and-play adding of IP devices will not work.
The Usage_Intro explains the concepts about how to use LinuxMCE.