I use it all the time for all my downloaded material. I don't know why people say the AppleTV can't play XXX codec or YYY video file. With AirVideo it can play every single video file in existence in a snap.
Yeah Plex is great. Not only will it transcode anything, it will also avoid transcoding when it's not necessary, including extracting otherwise-compatible streams from incompatible containers (basically remuxing on the fly), which the Air Video devs always said was impossible.