Little late to this topic as I don't visit this part of the site very often. My dad and stepmom have fallen in love with the UK and Australian programming I have and I was getting tired of burning dvd's so I bought one of these for them at Christmas and it works flawlessly. It's connected via hdmi to their 60" Sony HDTV and the home network. I can take files over on my pocket drive or a large thumb drive and plug it into their computer and transfer directly to the hub via their network or plug it in directly to the hub and move files to the internal drive that way too. It has played all avi's and mkv's so far and the raw mpeg files from the tv tuner in the computer. They went out and bought a regular WDTV Live plus a few weeks ago for the bedroom and now stream from the Live hub to the Live plus in the bedroom to their 42" Sony. They even took it with them on vacation to Las Vegas to use in the hotel.
My HTPC bit the dust a few weeks ago and I went out bought another one of the Live Hub's for myself until I have time to put a new HTPC together. I have it connected via HDMI to my 65" Mitsubishi and transfer to it over my network. I haven't used the online features a lot, but it has apps for YouTube, Netflix, Pandora, Facebook, Blockbuster and several others. I watched a little bit of Revision 3 via the Flingo app. It streamed really well.
I made up separate folders for TV Shows, Movies, Sports etc ... and it automatically put them into the video folder. I moved some photo's and music over to it also and it recognized everything and put them in the proper places. I will be getting a Live plus to put in the bedroom for the plasma and am looking at putting together a large network media server to use with these.