Full-featured PCs are getting smaller every day, and Intel's new "Next Unit of Computing," or NUC, is yet another example of the ever-shrinking personal computer.

At 4.6 by 4.4 by 1.5 inches—about the size of a very small box of chocolates—the NUC contains a Core i3 processor and two SODIMM memory slots, and can be upgraded with both a Wi-Fi card and mSATA SSD internally. I was most intrigued by Intel's DC3217BY model, which includes an HDMI as a video connector and a Thunderbolt port for storage.

Hmmm. HDMI. And a Thunderbolt port. The feature set made me think this particular NUC would be an ideal platform for building a compact media streaming box—or even a full-fledged home theater PC.

Home theater PCs are often massive beasts, shipped in cases the same size as beefy A/V receivers. Those are great if you want massive amounts of storage, or want to build in a high-end 3D card for PC gaming from your couch. But to me the diminutive NUC seemed like an ideal platform for streaming video from the Internet or local server storage. And if you wanted to, I thought, you could connect a hard drive to that Thunderbolt port, enabling the NUC to act as a light-duty DVR.

The NUC is available from sites such as Amazon for about $360, stripped down (no networking, SSD or memory). Here's how I built mine into one of the smallest home theater PCs you will ever find.

Under the hood

Loyd Case Intel's NUC is just a little bigger than a tiny box of chocolates. It's even wrapped in Valentine's red!

The NUC with Thunderbolt ships in a tiny, bright red case. Inside the tiny box is the motherboard, which features a Core i3-3217u. The 3217u is a low-voltage, mobile CPU clocking at 1.8GHz. The Core i3 CPUs don't support Turbo Boost, so that 1.8GHz is also the maximum clock speed. But the dual core 3217u does take advantage of Hyper-Threading, so it can run four threads simultaneously. However, the 3217u has a nominal TDP (thermal power rating) of just 17w, so it's very low power. The system ships with a small, 65W power brick, similar to what you might find included with an Ultrabook.

Loyd Case The NUC includes a 65W power adapter, but no local power cord, so you'll need to supply one.

Although the clock speed and performance is lower than most desktop CPUs, one advantage of using a mobile CPU, in addition to lower power, is that all Intel mobile CPUs implement the full Intel HD 4000 GPU. That's not true with most of the lower end Ivy Bridge desktop processors, which use the cut-down HD 2500 GPU. That translates to better overall graphics performance. Of course, video decoding and encoding is handled by the highly capable fixed function video block inside the GPU, which Intel dubs "QuickSync", so video shouldn't be a problem.

Building an NUC PC

Of course, a PC needs RAM, storage, and some way to connect to the Internet. So I built a system using a 180GB mSATA SSD, Wi-Fi card, and 8GB of DDR3 memory.

The NUC itself has four ports on the rear: two USB 2.0 ports, one HDMI video output, and the Thunderbolt connector. You'll also find the power connection and a Kensington-compatible lock connector on the rear. A third USB 2.0 port is on the front. There are no analog audio connectors, so all audio output needs to be routed through the HDMI port.

Loyd Case Most of the ports are on the rear, shown here. The front has one USB 2.0 port.

Four small screws built into the rubber feet attach the case to the base. After removing them, you lift the base off, which gives you access to the internals of the NUC. What you see are all the user-upgradable bits—SODIMM slots, full size mini-PCI Express slot with support for mSATA SSDs. Underneath that slot is a half-size mini-PCI Express slot, which can accommodate an Intel WiFi card. You'll find small screws near the two PCI Express slots. These hold down the mSATA and Wi-Fi cards, so you'll want to remove them before installing those cards.

Loyd Case What you see after removing the bottom plate.

The SSD used is an Intel 520 series, 180GB mSATA SSD. It's based on MLC (multilevel cell) technology and supports SATA 6gbps speeds. Note that you can use any mSATA card that uses full width mini PCI-Express, but you should avoid those half-width cards. Intel also supplied us with a Centrino Advanced-N 6235 Wi-Fi card, which also supports Bluetooth. As with the NUC itself, these cards are quite small.

Loyd Case 180GB of storage and WiFi + Bluetooth in the palm of your hand.

You install the Wi-Fi card first, since the SSD will cover the Wi-Fi card after it's installed. Carefully align the card, so the notch aligns with the tab on the slot. The antenna wire is prerouted, so all you need do is connect the extremely small connectors to the similarly tiny connectors on the Wi-Fi card. You may want to use small needle nose pliers for this task. The card will stay at an angle away from the motherboard; a small screw will lock it down, parallel to the motherboard.

Loyd Case The antenna connectors for the Intel WiFi card are tiny.

Once the Wi-Fi card is in, it's time to slide in the SSD. As with the Wi-Fi card, you need to align the notch with the tab. You'll want to insert the mSATA card at an angle. The card will remain at an angle to the motherboard, as the Wi-Fi card did. Intel built in a taller post with screw threads, so another small screw goes into place, and the SSD is now firmly held down.

Loyd Case The SSD sits on top of the Wi-Fi card.

The NUC uses SODIMM slots, like those used in many laptops. Given that the system would be using Intel HD 4000 integrated graphics, I wanted as much memory bandwidth as I could find, which meant finding reliable DDR3-1600 SODIMM modules. Corsair's Vengeance 8GB kit fit the bill. You insert the first (lower module) at an angle (making sure the alignment is correct.) Then you press down towards the motherboard until the SODIMM snaps into place. Then you repeat the process with the second memory module.

Loyd Case Storage, Wi-Fi, and memory all installed.

Attach the bottom plate with the four screws you removed earlier. Presto, you now have a working PC the size of a couple of packs of playing cards.

Other hardware considerations

If you want additional storage, you'll need to hunt down Thunderbolt equipped external hard drives. There are a number of these on the market, ranging from massive, pricey multiterabyte RAID arrays to small portable drives. In keeping with the tiny nature of the NUC, I experimented with Seagate's Thunderbolt portable drive, aka the "GoFlex for Mac with Thunderbolt." Despite the Mac name, this drive works fine with PCs equipped with Thunderbolt ports. The downside: it's fairly pricey for a 1TB mobile drive, at roughly $250. It's bus powered, however, so no need for another power brick.

Loyd Case The NUC next to the Seagate GoFlex Thunderbolt drive.

The GoFlex actually has two parts: the drive itself, which is docked to a small, USB 3.0 module. Disconnect the USB 3.0 module and dock the drive to a somewhat bulky Thunderbolt interface module. This is where I discovered another downside: the unit doesn't include a cable, and Thunderbolt cables, which are smart cables with tiny microcomputers, cost $40 and up. Still, the whole affair mates very well with the NUC. Bear in mind that this little portable drive can handle one or two streams well, but don't try to stream eight HD channels with audio, or you'll probably be disappointed. You'll need a full-size drive, or even RAID array for that—but then, you won't be using an NUC either.

Of course, if you plan on using the NUC primarily for streaming, then you don't need external storage. Bear in mind that you'll want a reliable Wi-Fi connection with a strong signal. If you don't have that, you may need to spring for a USB-to-Ethernet dongle, which is pretty inexpensive these days. All this presupposes that you have a good network infrastructure wherever you decide to install the NUC.

If you want to control the system remotely, a variety of wireless keyboard and mouse combinations exist, including Bluetooth hardware and compact keyboards with built-in trackpads. I used a Logitech Wireless Combo MK520, mostly because I had one around. It uses a tiny USB receiver with enough range to reach across my 16 by 16 foot media room.

If you want HDTV in, you'll need some kind of tuner. You can use any of a variety of USB HDTV tuners, but I already have a SiliconDust HD HomeRun Dual, which is a very cool device with two over-the-air HDTV tuners that will pipe HDTV signals to PCs over an Ethernet network. Increasingly, however, I'm relying on streaming over the Internet for much of my media consumption.

Operating system

I installed Windows 8 Pro, then obtained a key from Microsoft to install Windows 8 Media Center. Media Center is available at no cost currently for all Windows 8 users, though owners of Windows 8 standard will eventually have to pony up some money to get it.

Windows Media Center looks a little dated by modern standards.

In truth, I shouldn't have bothered. It's the very same Windows Media Center as was built into Windows 7, and seems a little dated. It works well, even with HD HomeRun. But support for streaming solutions seemed to have fallen by the wayside. Alternatives that work well for local streaming include the venerable (and free) VLC, and the streaming solutions built into Windows 8, in the form of the Video and Music apps. They're adequate, if you're willing to pay for content. You can also use other streaming services, such as Amazon Prime, Hulu Plus and, of course, Netflix. Both Hulu Plus and Netflix have their own native Windows 8 apps.

Let's fire it up!

I connected the NUC (along with the Seagate hard drive) to my Onkyo TX-NR 809 A/V receiver, to the HDMI input conveniently labeled "PC." The receiver takes care of all the audio processing, but routes video to a 60-inch LG plasma HDTV. Windows 8 and the Intel GPU drivers detected the Onkyo as a graphics device, and everything came up roses. I didn't even have to wrestle with overscan, which can be a problem with older HDTV displays or graphics cards.

Of course, you can just use Windows 7, but it looks like Windows 8 will be a very nice OS for home theater PCs. HD video playback and multichannel audio playback looked and sounded great. Standard definition video was just a touch soft looking, but acceptable.

One issue that may concern some users is noise. The NUC contains a tiny, laptop-style cooling fan. Even when running at its max, which seems to be about 2,000RPM, the box can get warm (but not hot) to the touch. CPU temperatures seemed to hover around 60 degrees C, which is warmer than my six-core desktop PC. The fan is noticeable, mostly due to its high pitch. It's not loud, but might bother some people. However, once you fire up any content with significant audio volume, you won't hear the fan.

Overall, the NUC proves to be a surprisingly capable little box, if you're willing to work within its limitations. It's no processing powerhouse, but Intel QuickSync video works pretty well, and audio was clean. The relatively high CPU temperature and fan whine might be an issue, but only time will tell. At its relatively low cost, I'm looking forward to experimenting with it in other scenarios.