Count me in the "2005 & VMC" camp. I put in some serious time investigating the potential benefits"of developing in MCML and came to the opposite conclusion of some of the others here. I
found the learning curve was pretty steep, and anything you learn about MCML is only
peripherally portable to development in any other environment (since MCML is proprietary to Microsoft's VMC application).
Further, the Media Center Sandbox forums make it clear that the
MCML & managed code development possibilities are rather limited to a set of very low-level "drawing components" and require you to
"roll your own" controls. I.E. if you want to draw a button, create a horizontal scrolling list, or emulate any of the 100's of
subtle UI features of VMC, you're pretty much on your own (there's no set of UI objects you can drag & drop into the Visual Studio IDE, for example).
I'm sure for someone who's dedicated to developing many add-ins for VMC, the MCML + "VMC managed code" environment is no harder than any pseudo-UI-driven language. However, for someone like myself who was interested in developing a single add-in for my Windows environment (and who initially though that developing in MCML might be easier than just writing in straight C# + using many of the suites of pre-built controls available), it seemed like I could devote myself to learning a framework/technology/language that had broader applicability outside of VMC.
Personally, I think the WPF approach has a lot more merit, at least if I was going to invest my spare time into coding up a Media Center add-in - it has a beautiful UI development model, you'll learn a more portable set of development skills, and the results of your coding can be leveraged by other non-VMC media applications too (e.g. MCE 2005, MediaPortal, Sage/Beyond, etc.).
I hope this is taken in the spirit in which it's intended - to make sure you're aware of the stumbling blocks that others have encountered, so that you don't inadvertently chase the same blind alleys, but can explore more productive options. Good luck with this and I'm very much looking forward to the outcome! [Glad to help out with it if I can, too.]