XBMC runs great on it (albeit a bit sluggish in the interface transitions sometimes, but not painfully so).
If all you need is the ability to stream network stored content at 720p, look no further than the $99 ATV2.
The downsides are its lack or extensiblity (many add-ons do not work due to the iOS platform and lack of internal storage)
I stepped into the XBMC world with my ATV2, but now realize that I need to upgrade to a full-blown HTPC now that I've caught a glimpse of the possibilities.
Having all of those wonderful add-ons listed, and not being able to utilize them is pure torture. Namely, the Netflix add-on doesn't work due to lack of Silverlight support.
This is a major drawback because as many found out a few weeks ago, the native ATV2 Netflix App can be broken by Apple/Netflix during firmware updates, forcing everyone to update (re-jailbreak) the Apple TV2.
When this happens, you hope there is a new jailbreak available for the new IOS soon, or you're stuck with no Netflix.
Superorb Wrote:All it can be used for is streaming though, it can't be used to do anything else that's more CPU intensive. For example, you can't play games or any of the SAB/Couch, etc addons.
For many it would be perfect if they could get it to output 1080p, myself included. I have a server to do all those other addons and I don't play games.