Trust me, even the best players will have a hard time decoding an 8 gig 1080p mkv with a bitrate of 8 Mbps. Have you had a look at the Roku 3 OP?
The best players? No, they won't.
OP, you need to consider a few things when buying an HTPC:
1) What OS do you want to run and will it only be used as an HTPC via the media player? This is important for a few reasons: you might decide to use this box as a central media server as well. Linux boxes are still finicky with Bluray and often take some configuration to get video card drivers working, and for noobs this can be a painful task. If you want to install certain addons and skins for XBMC as an example, you'll need easy access to the userdata and addon folders which can be complicated for noobs running Droid and Linux boxes. Personally, I prefer Windows for an advanced setup, Openelec for a simple setup, and Linux for a free setup with a steep learning curve or existing Linux knowledge required. If you want to browse the web, play a game here and there, or anything other than use the media player, then Openelec for example would not be for you.
2) What media system do you want to run? The most common, and well developed system IMO is XBMC. But Plex (which is built on the XBMC code) gives you the flexibility to transcode on the fly to other machines, allowing you to optimise your network capacity and stream to other devices without mapping network drives on the other devices, managing shares in the operating system, or running SQL databases. While I like Plex, I prefer XBMC. For a simple, multi-room setup, I'd recommend Plex. For a slightly more complicated setup, I'd recommend XBMC with a SQL library shared across all devices (my setup).
3) What content will you want to play? If you want to play 4K TV in the future without buying another media box, then consider your options carefully, as not all processors in the cheap category of boxes will handle it well. Do you want to stream live HD content at some point? If so, integrated motherboards like the E350 are not for you, nor are the cheap Android devices (most of the time) as the processor lets it down a bit if a file isn't encoded properly. If you want Bluray and 3D content to play, then you will need an i3 as a minimum. If you can sacrifice on these, then cheaper will work. My recommendation is a minimum Core 2 Duo, Atom, or i3 depending on your budget and what you want to play. Also consider whether you want passthrough of audio for DTS, Dolby etc. Do you want the box to handle the audio decoding or do you want it to pass it straight through to your AV receiver to do the decoding? Some cheap devices will not allow for audio passthrough. This is called bitstreaming, and is usually preferred.
4) Do you want to skin XBMC or another player? Do you want decent metadata and artwork support via various skins? If so, you need something with a minimum of 1gig RAM, but recommended is 2gig if you have or expect to have a large amount of media content. The Pi is a terrible choice for this sort of XBMC setup no matter whether you run the OS on a USB stick or flash memory. It just doesn't handle the data flow fast enough so feels very sluggish when navigating heavy, more beautiful skins like the Aeon range, and Arctic.
5) Is your setup going to be forward compatible and do you want it to be so? If so, then opt for a better setup rather than a cheap one. You don't want to find yourself in 1 year's time considering another box but having to limit the budget once again. Rather do it properly the first time around.
6) Form factor. Do you want a large file server box that acts as a media player as well? This is my main HTPC setup that serves content to other devices while acting as my main media box. Or do you want a mini-ITX or micro-ITX form factor box? Or a small Android box?
7) Control. Do you want to use an existing remote to control the box via HDMI-CEC passthrough? If so, investigate whether your components and the box you're buying can support this. Or do you want a dedicated media player remote? If so, consider FLIRC if you want to use existing remotes without the hassle of CEC passthrough. Otherwise you can purchase a Logitech Harmony remote but you will need an RC6 E-Home compliant receiver to make this work properly, or you can go cheaper towards a Compro K300 with receiver (which afaik is RC6 E-Home compliant). Or you can simply use your phone as a remote - there are some great remote control apps for Android and Apple - Yatse being the best on Android, and (IMO) XBMC Commander being the best for iOS.
So to sum up, consider the following:
OS, media player, file types you want to play, forward compatibility with newer codecs, newer formats, newer resolutions etc, audio bistreaming options, budget, and finally, control...
A lot of my vids are YIFY "1080" mp4's with some full HD 1080p vids (20GB+ per movie).