I am torn on whether or not to buy a Blu Ray player or just a BLU Ray Rom and build a Windows Media Center with Blu Ray built in?
Another question is willing the picture quality look as good on a media center PC with Blu Ray or a Blu Ray player itself.
What would be a good video card with HDMI out for video and audio?
That really depends. Do you simply want to watch bluray movies, or do you want to have the ability to do more, such as record TV or handle numerous media files? If you want to simply watch movies, get a bluray player. If you want a lot of versatility, a media center PC is a great idea.
Picture quality on a media center PC would be on par with a Bluray player, given you have everything installed properly.
There are a number of choices for video cards. I would really look at the HD 4000 series from ATI. That is one thing they really excel in. If you're building a computer from scratch, you can get an entire AMD platform that works great for multimedia. What's your budget and how much power are you looking for?
If you really wished, you could buy both. You can buy the media center and get a Blu-Ray reader inside. It might cost a lot more, but you'd be happy both ways. I'd personally say that you don't really need a media center computer. All you really need is an old computer that you can upgrade to have everything you wish.
And what do you plan to be doing with this media center PC? If you are going to do TV recording then you'll need a TV tuner. If you just want to watch movies and listen to music on it then just get a old computer (buy one for like $200) and upgrade it to your needs and put it right beside your TV or whatever and call it a media center.