I'm downsizing our cable bill, and recently got an AppleTV. It's connected to our kitchen TV where we had a Roku and the crappy cable box. So far, I am very impressed! Not a single technical glitch in setup or use so far, and super easy to use.
The downside is no Hulu or Pandora, which my wife uses a lot. I will be putting the Roku back along side the Apple TV, and investigating xbmc as well.
In our living room, we have an Xbox 360. Frankly, that does a fantastic job for Netflix and Hulu, and of course games. I also have to thank it for filling in the gaming gap in a Windows-less household! Unfortunately, it is clunky for other media. I use Rivet to serve content from our Mac Mini, which works well enough. Only problem is any video with 5.1 audio only comes through as stereo. (I think this is solvable, if I transcode to another format.) We also have an Airport Express for music streaming. It would be nice to simplify the system a little bit.
I actually would like another AppleTV for the living room, but can't justify one now. I'm kind of hoping Apple releases an ATV3 that supports higher-bitrate 1080p output.
A friend uses a PS3 to stream from a PC. My experience with it was pretty bad; took an hour for him to resolve technical glitches and get watching!