It's a very fine line for Apple. Supporting piracy-centric formats is a big stamp of approval which will hurt their ability to put together legitimate content deals. I'm puzzled why the piracy groups don't just adopt MP4/H264 as a standard distribution format. That would solve the problem and you get the added bonus of having metadata. One of the long standing problems of supporting the AVI container in a database driven UI is you don't have any metadata to work with.

If supporting "piracy-centric formats" were a turn-off to content providers, wouldn't the same thing have happened with the iPod, which support everyone's favorite piracy format, the mp3? Granted, the tv and movie studios are in a much stronger negotiating position than the record labels, but I don't think that would be a sticking point for them. I'd guess that Apple is pushing a single format for the same reason they do with their mobile devices - hardware decoding.

Didn't stop Microsoft from including DivX support on xbox360, and they have a wider range of content providers. At issue here is the legitimacy of Apple as content provider, not others.

I remember they took their time to add DivX support though. A couple of years maybe. And they still haven't released web browsing, which i'd find useful

A quick google search points to mkv being used by anime fansubbing groups due to ease of putting multiple streams in one container, and the ease of using any audio and video codec you choose. Then it spread. That and and the fact mp4 doesn't support the ac3 codec and that tools used to make mkv files tend to be better and don't suffer from audio being out of sync with the video problems as much.

I'm pretty much resigned to buying a Mac mini (current with HDMI), Drobo, and ipod/iphone dock. It does everything the Apple TV does and can also serve as a central media station / sync box for the iOS devices. Plus, I can get all my media off my dev machine and goto flash drives. I can then use my old Apple TV with a second tv.

It's an awfully steep price to pay for it though. It's convenient, but is it really worth 6x the price of an Apple TV or 5x the price of a WDTV Live?

I'm thinking that using it as the sync machine for iDevices and the keeping of all my content off my dev machine are probably worth the price. I can switch to SSDs (space for speed) and have fewer distractions on the dev machine. I am still thinking on it.

Assuming Apple can eventually get more of the networks and cable channels to share their content with the AppleTV the remaining big impediment for a consumer like me is live sports.

I'd gladly pay for a live and on-demand archive for my favorite sports teams (and/or leagues) streamed in HD to my television. I know there are cable/satellite options for this as well as some internet/broswer-based ones but is there any solution currently bundled into any of the Roku/Boxee/AppleTV devices?

It looks like it only plays h.246 mp4 files and that makes this totally useless to me.

It leaves us with a fairly simple choice... will we put up with a more complicated yet infinitely more extensible UI with a price premium of around $100[1] to fill in this gap, or are we willing to settle, get a nice UI, and pay $100 less?

[1] http://boxee.tv