Jon Hicks has a great post detailing the use of a Mac mini in place of an AppleTV. By going with the mini over the AppleTV, Hicks gets the added features of increased video format support, PVR functionality (through EyeTV), and DVD playback and ripping. The guide also focuses on how to make it work smoothly with a bluetooth wireless mouse/keyboard (and via screensharing in Leopard), and the drawbacks when things crash and you have to control it from your couch.
Although it sounds like there are some drawbacks to running a Mac mini from your living room couch, the added functionality certainly sounds appealing and I'll personally be thinking about going this option whenever I decide to stream movies to another TV or update my current AppleTV.
I love the logo in that first one (screenshot at right)