I've used an ATV for quite some time. I bought it mainly as a music server but also saved quite a few seasons of my favorite TV shows, concert movies, etc. To do this, they need to be in iTunes and either streamed or synced directly on the HDD. I bought the 160g version so I didn't have to stream. I ripped my DVDs using Handbrake and didn't find the PQ perfect and I'm a perfectionist. So I wouldn't use it for stuff that I consider for stuff that I felt I wanted GOOD video quality.
You can hack it to do Boxee. Pretty simple hack. Boxee will run Hulu. I have barely used this. I can't take the heavy compression and it is pretty dang slow. You can also hack the ATV to accept an external HDD if one wanted more local storage.
If you don't do Boxee, then your choices for free stuff is basically what you find in iTunes. Movie previews, Podcasts, etc. The offer occasional free episodes and they off specials on cheap movie rentals. If you don't mind paying for it, there is tons of TV to download by episode or season. Movies to buy or rent. You can also watch YouTube. Again, quality on a big TV is pretty poor for things like Youtube. Pretty good for iTunes stuff, particularly if you do HD.
If you want an ATV to get free stuff only, not really worth it unless you do the Boxee hack. There's tons more to Boxee the Hulu. I think you can also do Netflix streaming. Not positive though. I just got fed up with the slow navigation. Using iTunes, navigation is quick. If you want to rip your own DVDs and such and save the on it, again it is a great item.
From your message, sounds like you really just want to look around for free media on the internet. Check out Boxee and see if it offers what you want. It wasn't for me.
FYI: if you do any sort of hack on it and then an ATV official update comes out, it will erase your hack and you will have to hack it again. So you need to stick with the older version and plan on updating periodically. Updates haven't happened often historically.
As for ease of set up and use. Typical cake walk fashion that you'd expect from Apple. At least, I'd expect from Apple.

I actually have mine up for sale because I bought it mainly as a music server and decided that I'm going to go the Squeezebox route instead.
Good luck.