I have had similar problems that I did not have on a previous computer running 1.5 and XP Home Edition
I have a Media Center PC as well and I am running 2.0 now. One thing I have definately figured out is that I can only use 1 firewire device at a time (if my external hard drive is powered on, my computer will not recognize my camera, or it will recognize it but then fail almost immediately).
If you have uninstalled and reinstalled and it seems to be working now, then it was probably just a corrupt install to begin with. Media Center Edition seems to be quite finicky when dealing with Video Capture though so good luck.