Glenn, I'm sure if Apple could have made the Apple TV sound as promising without local streaming, they would have.

However, even its local streaming is primarily intended to stream video which you've purchased from the iTunes store. The formats supported don't really lend themselves to much more. I suppose some people may transcode their rips in the same way, but most people seem to now lean toward Matroska, with some old-school hold-outs still likely using avi. I use Handbrake, which does have the capability to support an mp4 container, but I still choose Matroska so have access to the Matroska tools and being able to include chapters, all the language tracks and subtitle tracks.