To answer some of my own questions for other people's reference here is some of my experience so far.
Windows Vista will not work in Bootcamp for since Lion came out. So my old versions of Vista Ultimate, and Windows XP were useless. Had to buy Windows 7 Home Premium which was an expense I hadn't counted on.
1. Windows sees the Apple remote, but inside Media Center I can only get the up/down arrows to function as volume controls. Remapping the buttons inside the Remote options in MC doesn't seem to do anything for me. I got Up to work once, but then when I try to assign Down MC throws a "this command has already been assigned" error.
3. Red October HQ worked for playback but it looked a bit like the computer was struggling when playing a Blu Ray rip so I switched back to standard.
4 & 5. HDMI bitstreaming works great. Switching inputs on my amp or turning it off also pose no problems for the Windows display.
So the next thing I'm struggling with is how to control MC comfortably. I'm considering a blue tooth keyboard/mouse combo, or buying a usb IR reciever and using an old MCE remote. But since I only plan on using Windows until the mac version of MC gets all the Windows features I'm reluctant to spend any more for plastic that might end up being useless again in a few months.