Early on in the life of Microsoft's X-box, an open source project was begun to provide software to turn the X-box into a media centre. This project was called XBMC (X-Box media center). Since then this highly successful project has been ported to many different platforms including the Raspberry Pi.
The easiest way to install XBMC on a Raspberry Pi is to use a custom distribution. This means copying a new disk image onto an SD card and putting it into the Raspberry Pi.
There are three commonly used distributions that all use XBMC but provide different ways of setting it up and configuring it for the Raspberry Pi.
There is not a huge amount to chose between these distributions. In this tutorial I have used Raspbmc, largely because there is an offline distribution (useful if you want to use a WiFi adapter rather than a cable) and because it is easy to get the image file, to copy onto an SD card, whatever you plan to use as a computer on which to make the SD card.