LOL, I hear you. It's a tough decision. It helps that I've been able to run an AppleTV for several months now without paying for it. It's pros are cost, and seamless integration with Netflix and Airplay from iOS devices and iTunes running on a Mac in your house. It is nice to be able to just grab the little remote and navigate around and pick what you want. Typing on it is obnoxious though.
If you aren't a big user of Netflix or iTunes then it's probably not the right choice. I am concerned about the tack Netflix has taken these past months, which is why I really am thinking that a full blown computer at a TV is the best choice. At least it will be more "future proof". The cons are cost, and your interface to said device. Which is why I'm not crazy about a keyboard and mouse. It's hard to use both from a couch. i.e. Navigating Hulu...
The best options I've found are;
* A regular wireless keyboard with a trackball built in. Probably the best cheap method. There are plenty on the market that can be had for around $50 give or take.
* As far as keyboard/mouse go this is probably the best choice out there, at least what I have tested myself:
http://www.logitech.com/en-us/keyboards/keyboard/devices/3848 Pricey though. Sometimes they can be found for under $100.
* One thing I've experimented with are using iOS devices instead. iPhone and iPad work great for remote controlling a computer hooked up to a TV. I think it's a viable alternative if you have one or more already. I would like to get my hands on an iPod touch and see how it is using that. Might be the best cheap method as a dedicated touch device.
As you can see the biggest hindrance to a setup like that is cost. So consider your options carefully. If you have any qualms about the AppleTV I'd recommend taking it back while you can and then create a list of goals you wish to accomplish, then budget it out and do it right the first time.