Mac Mini. The AppleTV is ok, but it isn't powerful enough to push true HD content, local storage is a pain, and any update from Apple is going to break it and you'll have to rehack.
I also, 2nd the Plex recommendation. I used Boxee on the AppleTV in the past and have both Boxee and Plex installed on my Mini. Boxee never gets used. The UI on Plex just looks so much nicer with so many more options. Both are based in XBMC so they all play the same formats (which is everything). Plex is also Mac only so the developers over time can really focus on adding features and building a very nice Mac-like experience.
The Mini will also give you options for other apps. Like Hulu's desktop app if you want a little fancier Hulu interface, or you can just pull up Safari if there is a show you want to watch on a site that doesn't yet have a Plex or Boxee plugin. I am also running Tonido on my Mini which gives me a server I can access from anywhere to share files or pictures with my friends and have access to my music from anywhere with the web based jukebox software hosted right at my house
Definitely mac mini, and forget about Boxee, get yourself a program called Plex. If you have a mac mini running Plex connected to your HDTV, you will be the happiest and coolest guy around
Mac Mini. The AppleTV is ok, but it isn't powerful enough to push true HD content, local storage is a pain, and any update from Apple is going to break it and you'll have to rehack.
I also, 2nd the Plex recommendation. I used Boxee on the AppleTV in the past and have both Boxee and Plex installed on my Mini. Boxee never gets used. The UI on Plex just looks so much nicer with so many more options. Both are based in XBMC so they all play the same formats (which is everything). Plex is also Mac only so the developers over time can really focus on adding features and building a very nice Mac-like experience.
The Mini will also give you options for other apps. Like Hulu's desktop app if you want a little fancier Hulu interface, or you can just pull up Safari if there is a show you want to watch on a site that doesn't yet have a Plex or Boxee plugin. I am also running Tonido on my Mini which gives me a server I can access from anywhere to share files or pictures with my friends and have access to my music from anywhere with the web based jukebox software hosted right at my house
I went through this same dilemma. I started looking at the AppleTV but was quickly turned off by its meager hardware. I looked at a Mac Mini but with a 2.26GHz CPU and 4GB memory the price jumps up to $1049 which seems pretty steep for what is a fairly modest computer.
Having owned both Mac and Windows machines I wasn't especially loyal to one particular OS so I decided to make my own media PC. Building your own PC is extremely easy, if you haven't done it you can find numerous how-to guides on sites such as C-Net, MaximumPC, etc. For $630 I was able to purchase a case, power supply, motherboard, Intel E7400 2.8GHz Core 2 Duo CPU, 500GB hard drive, DVD burner, Vista Home Premium and 4GB of DDR3 1066 MHz SDRAM. Those specs meet or exceed that of the Mac Mini. In addition to being faster and cheaper than the Mac Mini the homebuilt option will allow for much easier hardware updates such as installing a 3D card for gaming, additional hard drives or a TV tuner card. It's larger than a Mac Mini but the black case actually blends in better with my other AV components than the white Mac case. Downside is you'll need the better part of an afternoon to assemble the PC and download/install the software.
Right now Boxee is in limited beta release for Windows but is due to be released for download on June 23rd. Seems to be working fine so far though the automatic cover art selection is a bit wonky.
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Although it costs more, you are likely better off using a Mac Mini. The main reason for this is that Boxee supports Netflix instant watching, however requires you to use Silverlight which has minimum requirements that exceed the Apple TV's specs--meaning no Netflix. However, if Netflix is not an issue, save some cash and go Apple TV.
--Buzz