I have been using the Xbox Media Center (XBMC) to view video files for a couple of years and I like it very much since it is offering a great variety of settings -- but lately I've been having problem running hi-def video and mkv format. I guess we are slowly approaching the processing limits of the Xbox (unless the XBMC migrates to the 360). Therefore, I started looking for a replacement. The new Apple TV seemed to be a suitable candidate.
I've now been owning an Apple TV (the 40 Gb hard drive model) for less than a month and so far I am relatively satisfied with it. It looks very nice, play video well and offers a few bonuses (streaming photos, music, podcast, and youTube videos). You can either stream your videos to the ATV or synch them to store them locally. It is full of potential. Unfortunately, for now, there are three area where it is very limited. I guess it is a work in progress.
First, it plays only three video format: .mp4, .m4v and .mov (but the latter under very limited conditions; I've not figured out yet what make some .mov work and some not). However, you can use Quicktime or other video converters to convert almost any format into .m4v. I mostly watch .avi (plus a few .mkv) and didn't have any problems converting them, but it is a time consuming process (depending of the video format -- .avi seems faster to convert-- and the computer used to process the file, it can take from 30 min. (on my new iMac Intel 2.4 Ghz) to over ten hours (on my iMac G5 1.8 Ghz) to convert an half-hour episode). [UPDATE: It even converts the .srt files for the subtitles!]
Second, it is made to work only with a widescreen HDTV. I was able to plug the ATV to my old standard TV with an expensive component video cable and setting the ATV's resolution to 480i, but I am nevertheless losing some parts of the picture on each side. The XBMC has the advantage of offering various screen formats.
Third, you can only stream or synch your videos (or photos, music, etc) through iTunes, while with XBMC you can stream them from any of your computer drives.
Of course, most of those problems (save the TV resolution) can be solved with a hack. But while you crack open the XB only with a software, in the case of the ATV, you have to physically crack open the box and remove the hard drive in order to install new softwares that extend the ATV capabilities, like enabling SSH (Secure Shell, a network protocol allowing to communicate with the ATV and exchange data, therefore being able to install new softwares without having to remove the drive anymore), adding a file browser (ATVfiles), an external hard drive, play any video codec (through Perian) or even running the full OS X! But I am not encline to void the warranty of my expensive ATV -- yet. And all this “work under the hood” is rather complicated to perform. Many people suggested that the best way (although even more expensive) to replace the XBMC would be to buy a Mac Mini and use Frontrow to watch video. It has the advantage of being a fully fonctional computer.
However, I am not ready to give up on the ATV. As I said, it has much potential. Here are the improvements I would like to see in the future:
• Apple should open the Apple TV to developpers. If the ATV could play all video codecs straight out of the box and if it had the ability to run small application (the YouTube player is a start), then it would be, officially -- not in a hacked way, a more powerful media center than the XBMC.
• Adding a Gigabite ethernet (like Apple recently did for the Airport Extreme) would also be nice. Even with the standard 10/100 ethernet cable it is much faster to stream or synch than doing it wireless.
• Adding a radio tuner (either iTunes or ShoutCast). I really don't understand why ATV doesn't give access to the iTunes radio stations!
• A CATV tuner and PVR capability (but I already have the cable box/PVR for that -- so maybe the ability to take content from the cable box/PVR) would be interesting
• Ability to buy or rent content on the internet directly from the ATV. In fact, in Canada, we cannot even download TV shows or movies from the iTunes store, so for us the ATV--as it is right now--is pretty useless. I wonder why they even bother to sell it. So, first, let's hope that the Canadian iTunes store will soon offer TV or movie videos for sales.
• a fan (because the ATV is REALLY getting hot quickly)
• a switch off (I never understood this idea of building appliance without a switch off).
With those improvements, the Apple TV would be a great video appliance for an entertainment room and I would really enjoy it. However, for now, I cannot recommend it to movie & anime fans as a XBMC replacement.
For more information on the Apple TV, see this collection of Apple TV resources.