As much of an Apple Fanboy as I am, I don't get the Apple TV. It is just not worth $225 for very limited functionality. After much debate I bought 2 old IBM Thinkcenter PCs from ebay for about $80 a pop including shipping. These are built rock solid and came with 512MB RAM and 80GB HD. Spent a little $$ and got nice HDMI video cards, additional memory (Upgraded to 2GB), remote control with USB IR receiver, wireless keyboard/mouse. All in all for about $220 a piece I have nice HTPCs running Vista Home Premium in my living room and bedroom. I can stream blu-ray disks over my LAN to my living room and bedroom apart from all my DVDs, home videos, photos, music and most importantly I have the Media Center Netflix plug-in. Basically soup to nuts including iTunes and Amazon Video purchases. Since I have a wireless keyboard I can browse, watch HuLu content, YouTube and whatever else I want.
I simply rip my DVDs and Blu-ray discs in ISO format and have MyMovies plugin for Windows Media Center. As much as I hate Windows I have to admit there is no better setup than this out there today. And it has been working reliably for a few months now. I don't want to be restricted just to the iTunes store and I want to play DVD and Blu-ray discs. These PCs came with DVD drives so I can play a physical DVD disk if I want to. These are Pentium 3.2 Ghz PCs 4 year old PCs. They play Blu-ray just fine. Never had a problem. I use PowerDVD to play Blu-ray and DVD and it integrates well into Media Center. I love the freedom it gives me. No need to worry about unsupported codecs and Blu-ray support. It is all there.