I will be the first to admit, I know little about linux and this is my first time to experiment with building a PVR.

My friend has a media center remote that came with his Dell Laptop with Windows XP media center. It came with a USB receiver that I believe comes normally with the Media Center PC's out there. Here's an image of what it looks like (I supplied it from the PVR 500 product info, but I am fairly sure it is the same remote and receiver);

Remote

IR receiver

I tried searching through the forums first and I did not find an answer and looked through the wiki for an answer and also didn't find one. It could be in plain sight and if so I am sorry.
He never uses the remote and has offered to sell them to me cheap. Is this a viable remote for a KnoppMyth Box?

It should be. Look for "MCE remote" or "USB remote". Follow the directions you find (for R5C7) to test it. This could be as simple as running the lirc-reconfig.sh script.