I give Apple TV a big thumbs up.
For me, it's the most convenient way of getting my favourite movies onto the big screen. Now that iTunes movies are available in iCloud, I can easily browse my purchases on Apple TV and start streaming one of my favourite movies.
I don't bother renting, and I always purchase HD movies. The quality is very good, and nearly on a par with BluRay. But make sure your internet bandwidth is adequate. I have a 20Mbps link, which can buffer up a downloading movie several times faster than it can be played back.
Where it really scores for me is convenience. I don't have to search for a disk and wait ages while BluRay fires up. My movies won't get scratched or unplayable. I can send movies straight to the big screen from my MacBook or iPhone. And because I have the Apple TV connected to an AV amplifier, I can play my music collection in a similar manner.