I use VLC on a two monitor setup and full screen on my main monitor still leaves my secondary available for browsers/email/etc by setting extended desktop, but I'm running 7/64. I had liked XBMC as it has a rather snazzy android remote app which would suit him down to the ground and he needs a friendly library functionality. My experience of VLC is that it requires a knowledgeable guiding hand. The real difficulties I am envisioning are that his TV will be the secondary monitor and he wants to retain use of the primary (touchscreen) during playback so it has to be extended desktop like my setup. I imagine the blanking is down to DHCP requirements on the HDMI connection. My primary monitor is on DVI and second on VGA, but his primary will (I believe) need DP for the touchscreen with the TV on HDMI or DVI>HDMI to get 4:4:4 chroma sub-sampling. Please correct me if that is wrong.