[Kjesse]

It really depends on the system you now have in terms of what you need for a media extender.

If you have a 1080p TV and a windows systems with Vista or 7 (or even XP with Media Center), an Xbox 360 is the only way to go. An Xbox 360 costs about the same as an Apple TV but will allow you to stream 1080p movies from your computer.

Apple TV is easy to use, but has limited resolution and is locked down in terms of the kinds of media you can stream. It also forces you to use iTunes. I loved iTunes until I started using Windows 7. Microsoft has finally gotten it right. I haven't touched iTunes since, except to update my iPhone.

Media Center on the other hand (I am right now using Win 7 with a 360) lets me stream everything (Blu-Ray, DVDs, DiVX, XviD, MKV, you name it... there's just a couple freeware programs to install) in 1080p with digital sound stream (I only have 5.1, I don't know if it does 7.1).

I've ripped all my DVD's to hard drive, and also my now obsolete HD-DVD's.

However I have watched full quality Blu Ray on my 360 and I don't have a Blu Ray drive. I won't get into that.

Of course, if you use a Mac, Apple TV is the only way to go for an extender. If you use a PC, I can't understand why anyone would get Apple TV unless the rest of their system can't handle true HD.

With a bigger budget, get a full fledged computer for your home theater (PC or Mac), but really, it isn't necessary now that Windows 7 has solved some of the persistent codec problems of Windows Vista (problems which are still present with Apple TV) allowing you to get a 360 and just stream anything.

EDIT: For a router, go wired if at all possible. If not, Wireless N is a must, and you'll need a more expensive router than if you go wired.

2nd EDIT: I just checked to see if Apple has yet brought out a true HD solution for their Apple TV... since they are the media kings for computers.... and they haven't. They can only output in 1280x720 (720p) although they do advertise that they are "compatible" with a 1080p TV