I assume this was a response to me (although you quote someone else)...
I'm not saying you should store it all on your iMac... I know I sure don't. I have a NAS that offers RAID5 for some level of redundancy. It is always on. My iMac is always on. So I don't really care if it needs to pair to my iMac. It'd be nice if the files could go directly from the NAS to the AppleTV, but the current setup has not impacted my ability to play any of my files.
I fail to see how Apple is bullying you into buying anything from them. Like I said, you can have an AppleTV and NEVER visit the iTunes Store to buy/rent anything. Furthermore, x264 is a very capable open source h.264 encoder -- it offers better quality and more functionality than you'll find in some of the paid applications out there. You're confusing containers and codecs at this point. Apple has no incentive to support MKV because they already support MP4. If you have the originals, you can easily get them into a format AppleTV can accept, often at lower bitrates and better quality. Why should they include support for outdated (and inferior) codecs like xvid?
If you don't want to do this, then AppleTV is not for you... simple as that.
So at least you understand the necessity of a nas in this day and age, why won't you agree then that apple is lagging behind by not coming up with one and having a sorry excuse of a back up server/whatever the time capsule priced btw as much as a four bay nas.
So you are telling me the fact that you got to keep both your media storage device (the nas) and your imac running just to get the damn

I am fully aware of what codecs and containers are, I just don't want to be forced to one container. But it's more than that I have ripped dvds to xvid and like about 99.9999% of people with movie libraries 99.99999% of our libraries is in that format, now is this a good enough reason for you for apple to use it in atv? What do they want us to do, re-rip all our dvds? Re-buy them? That's like having itunes and going, ok, screw mp3, aac is better (which it is) we are not going to allow mp3 in. It's a damn media player, it shouldn't constict you to the codec or container it choses, it should allow you to chose. AND how about every single dvd player now featuring xvid? In my previous post I have made a crystal clear case about apple's greedy motives hear but guess what, they are wrong.
How can they prove someone is importing a DVD that they actually bought (i.e. they didn't rent from Netflix)? If you can answer that question, I'll be impressed because that is the very question that prevents any secure DVD copy scheme from making it into iTunes or any other program for that matter.
How can they prove that you are importing a cd you have bought and not one of your friend's or from a library? BINGO.
Obviously, you haven't kept up with what other commercial companies are doing. Apple is missing the boat. Read: http://www.cepro.com/article/print/is_your_dvd_server_legal_manufacturers_say_yes/
I'm really tired of fanboys who think Apple can do no wrong that and that Apple somehow magically knows what the consumer wants better than the consumer himself/herself does. Oh wait. You have your own whining in the next paragraph of something you WISH Apple would offer but doesn't.... Just how do you think that makes your prior paragraph look?
Apple clearly does NOT have a clue what people want or they wouldn't be calling it a hobby device; they wouldn't have called 1.x a failure to listen to the consumer; they wouldn't keep adding features over time and they wouldn't be asking consumers surveys about what they want. Get over yourself already.
Hear, hear couldn't agree more.