You should try my 1080p rip then. I've been very pleased with the performance of the Sigma SoC (in the Sage extender and a bunch of other products). So far the Boxee has been able to keep up, but i've already seen some issues on smaller videos which I'm chalking up to software issues with the current firmware.

I'm not sure if my TV can play video over its USB connection of whether it's limited to images. The only other experience I have with this type of integrated playback was on friends' DVD players with USB ports - none of them had terrific codec support though, nor container support for that matter (no MKV, no H.254)