Hardware

Time to get down to the business of turning your T5720 in to a home-entertainment system. But first a few words on the selection of hardware:

Choosing a T572x:

It's probably a good idea to go for a machine that's had HP's optional PCI expansion fitted as adding a 'proper' GFX card along with the extra room inside the case won't go amiss. HP still sell the upgrade kit if you struggle to find an example with the PCI upgrade.
Make sure you have a stand, for efficient cooling the T-series really should be stood on it's end. Also I'd go to HP's website and update the BIOS (latest at time of writing is 1.12) as earlier BIOS's can be a bit funky with some GFX cards and processor upgrades.

GFX Card:

PCI GFX cards are still easy enough to pick up. A Geforce 5500FX, like this one, is your's new for very little money and will do the job. If you intend to play HD content some hardware acceleration would help so a Geforce 8400GS would be your minimum. But be careful, the PCI 8400GS comes in two versions. Only the later one has codec hardware acceleration. Read the specs very carefully. 9xxx series cards are all fine but can be expensive.

Memory:

As usual with PC's the more the better. 512Mb will do though 1Gb (the maximum for this machine) will help, especially with my suggested OS mods. 200-pin PC2700 333Mhz DDR SODIMM RAM is what you're after.

Storage:

The T572x comes with a smallish solid-state drive that's plugged in to a standard 2.5" IDE header. I see nothing wrong with Windows if configured properly (sorry Linux geeks) but it can hit flash-drives very hard. For price / performance I'd suggest a good-old 2.5" IDE hard drive plus an appropriate ribbon cable.

Optical Drive:

To my mind a slimline external USB DVD drive is more than enough for occasional use. I guess Blu-Ray could be nice but I'm not convinced it's worth the huge investment in equipment - does anyone make a Hi-Def projector for sensible money?
I tend to rip all my DVD's to network storage for convenience. Also it's nice not to have to sit through adverts, pointless extras, and warnings about the evils of piracy EVERY TIME I want to watch one of my own DVD's. So much for the idea that the medium is convenient - at least you could FF through VHS.

Sound:

I have to say I find the on-board sound surprisingly good. The basic hardware does support 5.1 but there's only one (stereo) output. I'm working on how to get the full 5.1 to the outside world but for now the stereo to 5.1 splitter that came with my surround speakers is doing a good job. If you really want 5.1+ there are some very good USB sound cards along with ultra-cheap Chinese ones that I'm told work very well.
Some nice speakers would, of course, be good and should you happen to find a GFX card with HDMI-out then your sound woes are over - let the telly handle everything.

DVB-T Tuner:

Well, it wouldn't be much of a HTPC if you can't watch the telly on it. Having used up the PCI slot on a GFX card a USB version will have to do. There's plenty to choose from and most seem to be pretty good. eBay once again will likely throw up a bargain. My only warning is to make sure it's attached via the household aerial +/- a booster box. The 'Mickey Mouse' aerials these things come with rarely result in anything other than disappointment. Also plug the DVB-Stick directly in to your aerial socket and run a USB extension cable to the computer for a cleaner signal.

Human Interface:

eBay is again likely to be your friend. Grab a wireless / blue-tooth keyboard with built-in track-pad (or ball) and that's it. One that comes with it's own dongle would be easiest to set up.
While you're at it why not get some wireless game pads?

Display:

The chances are your TV and GFX card can handle one of VGA/DVI/HDMI/SCART/S-Video between them but it's worth keeping these in mind when looking for suitable hardware.
Just a thought: If you're in the market for a new TV a good DLP projector will be MUCH cheaper and gives more impressive results. Just do your homework and don't be taken in by the ridiculous price of projector screens - if the wall isn't good enough some white blackout material stretched over a wooden frame with velvet-covered batons for the edges will give a professional result for less than 30 pounds.