It's nothing new in consumer electronics industry but I must say it has come too quicker. The Apple TV is said to be already been hacked by an early addressee and he has managed to get it play nicely with XviD files, the non-supported video formats.
The practice involves:
1. Removing the Apple TV's hard drive, place in into an USB corral and mount it on a Mac, where it comes out as a native HFS volume.
2. Then, install the SSH server Dropbear, the Perian, and a custom script lets the Apple TV play files outside of its normal MPEG-4 and H.264 standards.
3. Put it all back in concert.
Anyhow, I won't call this hacking technique too effective as it necessitates formation of reference QuickTime movies for each XviD file. Moreover, the hack hasn't been tested for video formats other than XviD. But, this hack will surely educate many more to try their know-how with Apple TV.