I bought a WD Live the other day, and it's utterly fantastic.
It's small (About the same size as an Apple TV) and uses very little power. It can connect to a Wired network, or you can plug in a USB WiFi adapter. You can also plug a USB Hard Drive or Memory Stick into it and play movies directly off that.
As for networking, it can browse DLNA and Samba shares with a somewhat reasonable interface, and will happily play full bitrate 1080p content.
It seems to play most popular formats (Specifically, it'll handle h264/MKV and Divx/Xvid perfectly).
It also has built in support for Youtube, Live365, and Pandora radio.
There are a few flaws with it, but nothing major.
* Copying via samba *To* the attached hard drive is very slow
* Very occasionally loses lipsync. Can be fixed by pausing it for a second.
* Corrupt/broken files sometimes crash it, and it requires a full power cycle (Turned off at the wall) to fix.