Joeaksa,
Everything works great, the more insteon the stronger it gets. I have the smarthome software, and yes the computer needs to be on.
I have been thinking about moving over to a Mac, and they have some pretty strong software. My new Anthem unit, will allow Multi-room music, and with the Insteon Keypad can be used to controll the IPOD from any room that you have the Keypad.
http://www.perceptiveautomation.com/indigo/index.html
Then you have a Mini Mac, you can load all your DVD's on, and watch them in anyroom that you have a TV. This is a really bad hobby as one thing leads to another, which leads to another.
Michael