Here's a guide for the benefit of Peter, who's considering whether he should buy an iPhone or iPod Touch.
I've been using an iPod Touch as a remote control for close to six weeks now, and it's absolutely brilliant. I can browse my iTunes and Movie libraries, while also accessing any backed-up DVDs stored on my hard disk or computers. There are a number of different software app's you can use to control your source material, I tried out various before deciding upon Remote Buddy together with the iPod Touch.
The following descriptions are also valid if you want to use your iPhone as a remote control in this fashion.
The Basic Principle
An iPod Touch is a two-way, WiFi and Bluetooth enabled interface control screen. The screen is high resolution and reacts to touch in a most amazing manner - has to be experienced to be believed. Using basic finger movement across the surface, you can resize, move and select whatever is being displayed. Tapping activates functions or highlights choices.
The fact that the iPod Touch can be used with WiFi makes it possible to communicate through walls and over longer distances than what is possible with an infrared or Bluetooth remote - which comes in very handy.
However - in order to actively use your iPod Touch as an application remote, you will need third-party software. Remote Buddy is one such animal, Signal performs many of the similar functions and the people behind irTrans and iRed are working on a version 2.0 of their software which will lend their hardware control interface to the control surfaces of the iPhone and iPod Touch. (The latter solution is very promising, and is a combination of software and hardware that makes it possible to control B&O and non-B&O hardware - TVs, audio and DVD units - but they're working out some Leopard Operating System bugs.)
Basic Steps
Designate a computer that will serve as your source computer, and which will have Remote Buddy installed. I use a Mac mini, which is connected to a stand-alone digital media server, but you can use a regular computer which has your music stored on it. If you also intend to store movies (DVDs) you'll probably need more harddisk space, and would then want to consider having separate harddisks attached to your source computer (either via WiFi or Ethernet/USB).
Decide whether your source computer is the only "outlet" you'll be using, or whether you will want to attach one or more Airport Express WiFi units (AEs) in your home network. Each AE can be attached to an audio unit, large or small, using either analog or digital (Toslink optical) connections. AE units can receive up to CD-quality sound over WiFi.
You set up your peripheral AEs as you would ordinarily - your Remote Buddy enabled iPod Touch will find these when it's active, and you can then choose between Computer (your main source) or the AEs by the names you've given them.
Buy an iPod Touch or iPhone.
Purchase the Remote Buddy software from IOSPIRIT. It costs €19.99 -- I consider it as good a deal as the BeoWorlder Andy spending €30 on a Gold Membership and winning a Beosystem 7000!