I have to second the WDTV Live. I have one of these puppies and it kicks the shizzle out my nizzle - and is truly a geeks solution.
Its pretty much the only box that can handle full on 1080p video in a zillion container formats streamed over your network. It can connect to anything (windows, mac, linux, whatevs) with samba, and can connect with any server that puts out DLNA, so playon and TVersity and whatever will work (to varying degrees) on it too...so, Netflix, Hulu, Youtube, etc. are all in.
It does *not* do web surfing on your TV. I used to have a solution which would do this, and I quickly figured out that it was really rare that I ever wanted to have a full on web browser after I had access to nextflix, hulu, and youtube via a slicker and simpler interface. Its annoying as hell to use a kb and mouse on your couch...especially if you are watching teh pr0n.
Best yet? This solution is sub $200.