Apple's is undoubtedly a slick way to watch TV shows and movies on your TV, but you'll have to convert just about everything you want to play on it. Unless you pay to rent or buy content from iTunes, that is.
See also: Digital Home Advisor
The Apple TV (even the latest third-generation model, reviewed) can't play MKV files and you can't plug in a USB flash drive or hard drive full of your own videos. Instead, you have to stream them from a computer running iTunes. Heck, it doesn't even have any catch-up TV services such as BBC iPlayer.
So it's no wonder that many people are seeking an alternative which meets their needs. Here we look at the best rivals which are more flexible on file formats.
1. Western Digital WDTV Live
The new WDTV Live (not to be confused with the old model of the same name) includes BBC iPlayer, Netflix, Spotify, YouTube, Vimeo and Acetrax movies.
Better still, it has almost endless support for video formats. Just about anything you have will play on the WDTV Live, from MKV to ISO and XviD. For the full list of supported formats, see Western Digital's website.
Files can be played from local storage via USB, or across your network (there's both wired and wireless networking built in). The HDMI output means there's Full HD support.
It can't mirror your iPad's screen as an Apple TV 2 or 3 can, but there's a remote control app for iOS which is similar to Apple's Remote app.
Possibly the best part is that the WDTV Live costs only £80, which is £20 cheaper than the Apple TV.
2. D-Link Boxee Box
The quirky Boxee Box, reviewed takes its name from the freeware Boxee HTPC (Home Theatre PC) interface. Previously the preserve of super-geeks who would build their own living-room PCs exclusively for entertainment use, companies such as D-Link have produced hardware specifically to run the Boxee software so everyone can benefit.
Like the WDTV Live, the Boxee Box has BBC iPlayer, but the other UK catch-up services remain absent. Other streaming services include YouTube and Pandora, and you get Facebook and Twitter access too (the WDTV Live also has Facebook).
The Boxee Box's remote has a QWERTY keyboard on one side, making it easy to use services such as Facebook and when you need to search for videos in YouTube.
Ignore initial reviews at the time of launch as a firmware update sorted out problems with performance and the interface is almost as good as the Apple TV's.
Format support is good, with MKV, FLV, AVI, DivX, MP4 and WMV among others. There's no built-in storage, and it costs around £140, making it poorer value than the WDTV Live.
Next page: Roku 2 XS, Xbox 360 and Sony BDP-S490
3. Roku 2 XS
You’d be forgiven for confusing the Roku 2 XS with the Apple TV: they're both black and around the same dinky size. They even cost the same at £100 on the nose. See also: Digital Home reviews
Like the new Apple TV, the XS supports full 1080p HD output but has a wider range of services including BBC iPlayer, Netflix, Vimeo, Flickr, and Crackle (free films).
Unusually, you can also play casual games via the Roku on your TV, including Angry Birds and Pac-man.
The Bluetooth remote control, like Nintendo's Wii, supports motion-based control for easier gameplay. A micro-SD card slot means you can add storage for more games in the future.
There's Bluetooth but no DLNA capability, and video format support isn't the best. Via USB, for example, you can play only MP4 (H.264). There's no MKV or DivX support.
4. Xbox 360
Microsoft has updated the Xbox 360 constantly since it launched, and it's now a solid media player and streamer. Not only is there plenty of content to buy from the Zune Marketplace on Xbox Live, but the Xbox 360 can also handle DivX, H.264 and MP4 files. Only original Xbox 360 consoles lack an HDMI output, with more recent models supporting full 1080p output and Dolby Digital 5.1 audio.
The new Metro-style interface means it's easy to use, and the built-in DVD player means you can watch your DVD collection too.
Let's not forget, of course, that it's also a formidable gaming machine - the Apple TV has no answer on that score.
You can pick up the new slim Xbox 360 for £140 with a 4GB hard drive, or £180 for the 250GB model. Alternatively, turn to eBay and pick up an older, used model for under £100.
5. Sony Blu-ray player BDP-S490
For just a few pounds more than the Apple TV, you can pick up Sony's new Smart Blu-ray player. Not only will it play 1080p Blu-ray movies with HD audio (obvious, but a great advantage that the Apple TV lacks), but it also upscales DVDs to HD. It also plays 3D Blu-ray films, but if you don't need 3D, the BDP-S390 is a little cheaper but the same in every other respect. A Wi-Fi enabled version of the BDP-S490 costs around £140.
The S490 Blu-ray player plays a wide variety of video formats from USB drives and can also stream across the network from DLNA servers. File formats include: MKV, AVCHD, Xvid and MP4.
Internet services include iPlayer, LoveFilm and Demand 5, making it one of the best alternatives to the Apple TV, especially if you want catch-up TV services.