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.
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.