I have a first generation Apple TV (40GB) with the latest firmware (2.0). It's set up to receive a stream (802.11n wifi) from my main system's iMac for music, and also has about 10,000 digital photos stored on it. It's hooked up to the system in my family room using the optical out for audio and component out for video (I need to look in to an HDMI switcher). Other than using it as this systems main music source, it's a blast for watching YouTube on a large screen. I haven't used it for movies at all, at least not yet.
Does anyone else use one of these?