The Raspberry Pi is a credit-card sized computer that plugs into your TV and a keyboard. The SoC is a Broadcom BCM2835. This contains an ARM1176JZFS, with floating point, running at 700Mhz, and a Videocore 4 GPU. The GPU is capable of BluRay quality playback, using H.264 at 40MBits/s. It has a fast 3D core accessed using the supplied OpenGL ES2.0 and OpenVG libraries.
You can now purchase an MPEG2 hardware decoder license. Depending on your tuner this may help your recordings play.