Check you advanced display property settings (you can get there from Control Panel, or right click the desktop and pick properties, then go to the 'Settings' tab, and click advanced). There will likely be a tab where you can switch to TV output, but make sure your tv is hooked up. It might not display the option if your computer doesn't detect the TV signal. This all depends on what video card you have though. Also, you should be able to watch anything on video-out, including divx and dvds. You may run into a problem with macrovision on dvds, in which case you'll have to get a work-around for macrovision. Also, if you're planning on running any games, your TV out will likely be limited to a certain resolution, like 640x480, or 600x800 (even though this is higher-res than TVs). Make sure you change the resolution settings of your games before running them in TV mode.
If your computer is a laptop, you may have to hit a function key combo to switch display modes.
Hope this helps.