Once Microsoft enabled MPEG-4 and H.264 video streaming on the Xbox 360, I finally upgraded to the full version of Nullriver's Connect360 software. It basically allows all of your iLife content (iTunes, iPhoto, movies) to be streamed from your Mac to your Xbox 360. Here's a few thoughts I have after spending some more time with the software and how it may or may not compare to buying an AppleTV.
You obviously can't access your protected music that was purchase from the iTunes Music Store. But other than that, using the Xbox will give you access to pretty much anything else. The Xbox interface is not as pretty as the AppleTV interface, but you can access all of your artists, albums, and playlists, much like you do from iTunes or the iPod interface. I think the coolest feature is that you can add a streaming internet radio location to a playlist and the Xbox will play that stream on your TV or stereo.
Viewing your photos in HD sure is pretty. I've viewed them on my TV before via my TiVo and via my iPod. But viewing them in standard definition just doesn't do them justice. They are fuzzy and small and just look bad. But viewing them in HD makes them look fantastic and this software does a good job of getting your high quality images to your TV. Again, the Xbox's interface here is the letdown, as there's a lot of real estate on the screen that is wasted. But at least it works.
Before the additional MPEG-4 and H.264 codecs were added, I had only streamed one movie to my Xbox. It was an HD flyover of a coral reef that Microsoft had on its WMV Showcase and it looked sweet. I was very impressed that my 802.11-G network could stream an HD movie from my Intel Mac Mini to my Xbox 360. The latest version of Connect360 will allow you to see any movies in your iTunes library as well as any in a folder you designate (e.g. your Movies folder). In my tests, I was able to play back my MPEG-4 home movies, but I couldn't play any H.264 movies that I had encoded for my iPod. Apple uses the Low-Complexity version of the H.264 Baseline profile, while the Xbox only supports the normal Baseline profile. So the takeway is that if you want to encode a movie for both the iPod and the Xbox, it seems as though the only common format right now is plain old MPEG-4. H.264 won't work for both.
I also tried viewing some of the HD Podcasts available through iTunes now. A podcast from the Washington Post played okay at first on the Xbox but then got hung up. This could have been a bandwidth issue or a lack of memory on my Mini (I'm currently only running 512 Mb -- long story not worth repeating here). When I tried to play a podcast from MacBreak, it wouldn't even start, with the Xbox claiming it was the wrong format or something. So I guess your mileage may vary on this one.
For $20, and assuming you have an Xbox 360, I think using Connect360 is a good solution. At some point, I'd like to get an AppleTV since it has a much better interface and integration with iTunes, etc. But the Xbox 360 is suprisingly useful as a media hub, even for a Mac user. There's enough support and functionality here that I'm still considering getting an EyeTV so I can record local HD content on my Mac mini and then stream it to the 360.