If it was just me, I'd be willing to put up with a fair amount of non-usability. Since my wife also needs to use this, usability matters an awful lot. Right now, that means the walled garden is the place to be.
At this point, I need to decide whether I want to keep the Apple TV or whether I would rather go back to using my Airport Express, which I can now happily drive from a laptop via iTunes sharing from the server upstairs. Bonus for the Apple TV is that it's relatively slick, shows album art, and has all the video features that I may or may not ever use. Minus for the Apple TV is that the search interface is clunky; they really need a proper keyboard. Another minus is that the thing consumes enough power that the case is hot enough to cook on -- and there's no off switch.