There's an interesting list of new Media Center features on Windows 7 here and a video with Windows Media Center Program Manager Noah Spitzer-Williams I embedded below:



The list includes:

- Changes to the way videos are displayed in Video Library to include Thumbnails AND Names for each video. - Support for H.264 Video - no 3rd party codecs are required to play H.264 content.
- Video Play-All Option (think of it as a ?Video Slide Show?) with ability to navigate between each video.
- Developers can take advantage of the new Import API for Windows Portable Devices. The new API enables photos AND videos from portable devices to be imported directly within Windows Media Center.
- Ability to create Slide Shows (new Slide Show pivot) with your pictures and can contain pictures or music or both.
- New On-screen Keyboard (Touch-enabled).
- Improved Rating Controls within Windows Media Center UI.
- New Ratings Pivot for quick access to your favorite content.
- Play Favorites feature with new Slide Show style.
- Auto Slide Show feature acts as a screensaver for Windows Media Center.