I actually do the exact same thing - though with AppleTVs & iOS devices, i.e., rip my own physical media, store it on my own server/NAS DRM-free. While I dig conceptually on DLNA providing streaming services to things like our PS3, Xbox, etc., all our TVs have an ATVs. I also really like the consistent experience - all local content is provided with the same UI, external services the same (switching between the PS3 or TV Netflix interface and the AppleTV is a bit jarring, especially for my wife and my little girl - thats why we covered every set with an ATV, especially at refurb or used prices). Also, setting up content controls/restrictions work great, especially with properly a properly tagged source (easily accomplished, and nearly automated with Handbrake + Subler).
All that being said, a few things that would improve Apples home AV experience (these dont effect me so much, just some observations on missing features/functions for most folks):
- AirPort, TimeCapsule iTunes services
- AppleTV direct connect storage
- Improved iOS remote (this really needs to be a mirrored UI vs. a traditional remote emulation, though the direct KB entry is much appreciated)