I am in exactly this position now... what to do. The only problem is... NO Money, because CABLE is taking it all!
Just expanded analog CATV is more than $70 per month, on top of Cable broadband internet, a somewhat more reasonable ~40$.
I want to get rid of that 70$ bill that feeds 60% crap into my TV, and shows at least as many ads as network broadcast. I don't want to replace it with an ugly dish, and a bill to someone else. I would prefer a buy-once solution, and on-demand service for streaming or buying content of my choice later on. It was a hard enough decision to accept a phone contract for my iPhone.
There are a few shows, though, that I do like on cable, and don't particularly want to miss them. Most are on Hulu, or otherwise available, although TBS tends to screw with Apple browsers, and not play.
Preconceived requirement: Apple interface. prefer not *nix, and really don't want Windows Media Center.
1: if I pull TV down from a tuner, I want to be able to time shift it. DVR functionality. AppleTV doesn't have it at all.
2: Sometimes I just want to go down the street, and get a DVD, or theoretically someday a BluRay disc for a high-def screen if I ever can afford one... without blowing out all of the bandwidth for my network connection.
3: I want a device that will play media from it's own hardware sometimes. Hulu even is jittery and has to re-buffer sometimes. I don't generally mind a hickup, but sometimes it can get bad.
4: I don't want to buy TV to watch it one time. Either time shift a broadcast, or present a streaming episode online, without costing money to watch it once. If it is fantastic, I'll consider buying it and keeping it on file, like I do with a couple of TV shows, like Firefly on DVD. Most TV is not that good, and once is plenty. I don't need to buy that, and store it on my drive space indefinitely.
5: I want it to replace most, or possibly ALL of my media player components in my home theater stack. Apple-box->Monitor, and Apple-box->Digital Audio Reciever->Speakers. The interface of the Apple box should handle all the switching, and AV only does audio decoding and volume/amplification. I would love to be able to buy a High-Def monitor only, without a tuner in it, or speakers built into it.
So...
AppleTV comes up short. It isn't a DVR. It won't play optical discs. It won't do 1080p High definition, and it won't stream content from the net. Boxee comes close, as long as I keep my upscaling DVD player around, or buy an additional BluRay player or something...
MacMini comes up short, because it will do more of those things, but should be able to do them better and cleaner than the nearly 600 day old machine is spec'd for, and it is getting more expensive, once TV tuners are added, and such.
A hackintosh is about the only other way to go, and that is hardly a turnkey solution, and could have compatibility issues in the future, and isn't a market-wide solution for the less-than-hacker-savvy user.
Apple is famous for simplifying things that everyone does. Why do they leave so many features that real people would use, if available to them?