Remote Control

Windows Media in Vista can be controlled by a remote.
They come in all flavours:
Simple ones offering you an array of buttons using IR.

 

Universal remote control

Universal ones includes a nice touch screen and allows you to control almost any piece of equipment in your home using RF

Remote desktop

There is another way to control a PC, login from another computer using the Remote Desktop.
Today's netbook's are cheaper than many luxury remote controls.
No, you can't control other equipment.
Yes, you have exactly the same interface as if you where working on the remote computer locally so you can not only select a song but edit it too.

Asus Eee PC 4G  € 299,-

 

To login on a remote computer you need XP Pro or Vista Business/Ultimate on the remote
In case of XP you can also use TightVNC.
In case of Vista freeware like TeamViewer will do.

Smartphone

A plethora of applications has become available for the Android and iOS platform.
This allows you to use your phone as a remote control or play audio on the phone using the content on your home network.

Often this is done using DLNA.