OpenELEC is a bare-metal installer. That means it provides its own operating system (a variant of Ubuntu Linux) that boots in a few seconds to XBMC (so you, the end user, are actually dealing with XBMC). In fact, you can install OpenELEC to a thumbdrive so that you can test it with your hardware without installing it to a hard disk. In fact, if you so wish, you can set it up that way, so that you can pretty much reserve your hard disks for your data.
I strongly suggest that you go to their site so that you can see its features and assess if it is for you. If you are a Windows user, don't be put off by the fact that you won't be running this on Windows, as most often you won't be interacting with the underlying OS ... just with XBMC. Of course, if you intend to run the latest Windows games on it, then this is not for you. If however, you are looking for a simple, system that will allow you to manage and play your videos and music, then I urge you to at least take a look.
I am in no way connected to OpenELEC, so my opinions above, are just that ... opinions formed through usage. In the end, go with the system that best suits your needs. Give me a holler if there are things that I might be able to help you with.