I picked up a first generation Apple TV and I am looking to use it as a media center, mostly for netflix but streaming from a computer wouldn't be terrible. Also, if I recall, it is capable of firefox or another browser, if it can run sites like Hulu or others would be amazing.
What is the best way to go about this and achieving the highest level of utility from this little thing for someone that doesn't buy a bunch of stuff through iTunes to watch?
My 1g currently runs Mythbuntu 10.04. It does quite well as a web browser, music player, and, of course, MythTV frontend (will handle playback of up to HDHR 1080i recordings using XvMC).
It won't do Netflix streaming, however; but as you can read here, Netflix streaming is not a Linux issue, but a DRM issue. So, in the mean time, I do my Netflix via Handbrake.
You can't run Netfix on the Apple TV (1st gen). However you can run XBMC which works great on the ATV to stream local content - Link. You can also run Boxee which gives you Hulu and Pandora. Good luck.