Ok, at the risk of getting technical... ;-)
We're comparing this device with an HTPC right? For this device you also need a harddrive right? So if you add R800 for a drive for the pc, you also need to add R800 to this device. That already puts you over R3000.
As for the rest of your estimates. I was suggesting buying a secondhand sff pc. They're cheap, looks great in your living room and are very quiet. For playing 1080P movies with CoreAVC, the minimum CPU requirement is a P4 2.8ghz. You can easily get a pc like that for very cheap. You don't even need a mouse and keyboard.
What I paid for mine:
Aopen XCube small form factor pc: R850
It came with a Geforce 5200, 1gig DDR400 ram, a P4 2.4cpu, a 40gig drive and optical sound output (spdif).
MCE Remote: R100
500gig harddrive: R800
VGA cable to connect to HD tv: R80
Wireless card to connect to my home pc: R100
Total: R1930
It plays 720P movies perfectly and if I just upgrade the CPU to let's say a 3.2ghz HT cpu, it will play 1080P movies as well.
For what I'm getting out of this, it's a LOT better than a standalone device.