It plays most x264 encoded files without an issue, but it struggles with some x265 files. Also, it has trouble with 3D x264 files, which my nine-year-old TV can handle perfectly. It also isn't reading all audio tracks properly. On one file it defaults to a different language and has no option to switch to English (but the TV can correctly see the English audio track). Plus it can't play any .avi files, which were the standard for a long time.
Oh and before you blame wifi issues, the Roku and the TV both use wired connections through the same switch.
The TV's internal media player is clunky to use with my AVR setup, so I hoped to streamline everything by getting the Roku. It's good for streaming apps for sure, but it's not good enough at playing media files to obviate the need to switch to the TV.