Xbox 360 and Media Center
For nearly the same price as AppleTV you could get a 360, and if you've already got a Vista Home Premium or XP MCE PC then you're sorted - with the advantage of having a 360 too!
MS seems to have cracked this. I have a number of machines but use a 4 year old custom box for my media centre.
Athlon 1.5Ghz, 512Mb RAM and a 160Gb IDE HD. Vista Home Premium on it and my 360 is used as the extender.
Quality is superb on it - even on 802.11g used on the 360.
Obviously the AppleTV box is MUCH cheaper is you don't have a PC with Vista Home Premium / Utlimate / XP MCE already.