In my opinion, some ION2 nettop with minimal Ubuntu and XBMC would be better option than WDTV. More expensive, yes, but not that much[1] and definitely provides better experience.

[1] Note that I'm in EU-land, where AppleTV is 120 EUR, which is 160 USD. Acer/Asus/Zotac/other nettop vendors do not have the same problem with currency conversion that Apple does.

I've got XBMC on an Acer Revo nettop, and having a little always-on Ubuntu server has various other uses for me.

Apt-getting installs/updates to XBMC rather than jumping through whatever hoops you need to for this is a blessing too.

One downside, you'd need to buy a 3rd party remote and USB-IR receiver and get it working with Ubuntu/XBMC. (At least I did, I think the newer version has one built in).

I'd like to get rid of IR remote with non-standard receiver and replace it with Bluetooth one (Sony PS3 Blu-Ray remote). Anyone has experience, how long the batteries last in this thing?

See XBMC Live, which is just as you describe (Ubuntu/XBMC) http://wiki.xbmc.org/?title=XBMC_Live without installing yourself. Apology if that's exactly what you meant.

I use boxee on a HTPC and love it. Boxee is heavily based on the XBMC code base but adds hulu, netflix and other VOD streaming and a nicer (IMHO) interface. There is also a standalone boxee player, I don't have it, and there have been some problems with getting all the supported content on it, but I believe that is getting worked out.

I used XBMC for years, but boxee is just a nicer experience for an Internet connected HTPC imo.