The first thing I tried was Virtual Server 2005R2 running on top of Windows 7. This appears to be a very good solution because it allows a single machine to act as a PVR server, a HTPC front end, and a backup server.
I installed Windows 7 x64 on my secondary pc with my TV tuner installed. Since the plan was to attach this computer to the TV for everyone to use, I wanted to keep the host os locked down. I created a passworded user account to act as the administrator and an open account to be used soley for HTPC duties. You can follow this guide to learn how to set up a Windows 7 user account to auto-login upon boot.
Virtual Server 2005R2 was selected as opposed to something like VirtualPC or VMWare Workstation because it runs as a service and therefore has the ability to start the virtual machines when the computer boots without first logging in. Also it has nice remote management functionality that is done via a web interface.
While attempting this, I learned that Virtual Server 2005R2 and Windows 7 do not work well together. Ben Armstrong has posted a great workaround for this issue. Ultimately I decided that for a system that I wanted to be a stable backup server I did not want to have to hack around getting the program to work. I also had slight issues with the web interface.