Just to add more confusion into the mix. I've spent more time playing different files side by side.
Seems that the FreeAgent Theater+ has a bit smoother playback with faster framerate videos. I'll have to find some 60fps HD files I have to confirm.
I have some videos with multiple audio streams that are completely out of sync with the WD TV Live, but are prefectly in sync with the Theater+.
It seems most problematic videos for the Theater+ are some 1080p mkv Anime movies. Seems that most are fine. It just happened that the very first video I launched had problems. Go figure. One thing that's really annoying is that the Theater+ does not always tell you which subtitle is what. You get "Subtitle 1, Subtitle 2, etc." While with the WD TV Live, shows which languages are what. Also, the drop down menu bar pauses the playback with the Theater+ while it does not stop playback with the WD TV Live.
Comparing sound quality is another matter. Neither the WD TV Live or the FreeAgent Theater+ sound as good as my basic Home Theater PC using KMPlayer and AC3Filter SPDIF passthrough. Sound is less dynamic, sound localizations are not as distinct, and not as clear.
For browsing SMB Shares (windows xp and vista in my case) over the network, the Seagate Theater+ seems to be faster and more stable than the WD TV live. Network shares disappear sometimes with the WD TV Live, requiring powering off and then on, or going into network settings and doing "automatic" discovery. The Theater + also uses more screen space to display titles (I don't like Thumbnail views), while the WD TV Live wastes a lot of useful screen space. Oh, and for punching in Username and Passwords for network is really annoying without a keyboard, but at least the WD TV live displays the last letter typed (e.g. ****d ) when entering a password, while the Theater+ only displays asterisks (e.g. ***** ).
Overall, it's kind of a mixed bag. Both have issues, but have good picture quality. Audio quality is mediocre at best. Even a simple HTPC set up has noticeably better sound. But you could own both the Theater+ and the WD TV Live for the price of building a decent HTPC. So you really can't go wrong either way, given how cheap these things are.
I give the WD TV Live a better rating, because it's more compatible, and easier to use.
The SHT - Stealth Home Theater