Apple TV vs. HTPC

Naf

For a while I've been looking to transfer most of my PC power upstairs into the spare room (now my study), and put a basic terminal downstairs for watching movies streamed from the main computer upstairs. Essentially the only things it would need to be capable of would be streaming movie files from another computer over the network (wireless N, Gigabit wired) for which I already use VLC streamer on iPhone nd iPad, and watching catch-up services (iPlayer, ITV Player, 4OD & Demand 5).
It seems to me that putting together a terminal (HTPC style probably) would cost me upwards of £300, but an Apple TV (the box that plugs into your existing TV, not a full new television) would only cost me £99.
Does anyone know (ideally from experience) about the network streaming capabilities of the Apple TV? Specifically if it needs to be part of my iTunes library for it to access a file (Home Sharing), and does the format matter in this case (the vast majority being in XviD currently); could my existing VLC streamer's broadcast still work?
The Apple marketing of the thing is rather sketchy in the specifics of the device's actual useful capabilities.

jayme1

Stock out of the box, to play any local network content the files have to be in iTunes with iTunes open on the computer already on, the only file types iTunes can use are mp4 and mov so you would likely have to transcode all the xvid files and add them into iTunes to play them on the appleTV, also there are no catch up apps for the appleTV either.
If you get a 2nd gen apple TV it can be jailbroken to run xbmc and play loads of video formats and apps for at least some of the catchup services, the current 3rd gen appleTV (the 1080p one) cannot be jailbroken yet.

If the VLC streamer has airplay you could stream the video to the phone and then to the appleTV via the phone, not sure how well that would work.

I have a WD TV Live which I use to stream files from my computer to the TV it has much better format support (plays pretty much everything) it also has iPlayer but not other catchup services, the interface is not as 'pretty' as the aTV but honestly it's not bad and it does it's job, because all my files are organised in file structures on my computer I use the File browser menu to access my content instead of the individual 'Music/Video' menus as it doesn't have to build its library. The 2 USB ports can also be used to play files (and also share the drive on the network)

So to sum the appleTV is great if you have a very apple focused library and all the content in iTunes (and correctly named), but a WDTV (or a HTPC) gives much better format support and the HTPC gives a proper web browser for catchup services.

Also as an add in, I'm not sure if it can play xvid (I know it can't play mpeg2), but you can install xbmc on the raspberry pi and use an xbox remote as an alternative to a HTPC, aTV ect. could be worth a look at.

Naf

Sounds like the AppleTV isnt exactly what I'm looking for perhaps. Further research suggests that I can use the cath up apps on the iphone/ipad then Airplay them from there to the ATV, and that the same applies for VLC Streamer; but that would then tie up the device entirely, what if I receive a text or call, or want to browse (depending which device I used).
I might be as well buying a cheap netbook or similar, or rebuilding a basic PC from bits I have around and just buying a case.
Decisions Decisions...