Microsoft > Apple (for watching BSG in specific circumstances)
My house is heavily Appled. My new media center has an Apple TV at its core. I use Airport Expresses and the iPhone remote app to send tunes to other rooms (or will once more speakers show up). It's a whole thing.
One major annoyance has been watching downloaded videos that weren't downloaded from the iTunes store. Specifically, Battlestar Galactica. In general, I like the iTunes store for video. I've bought a bunch of stuff even before owning an Apple TV (which makes the experience even better and now delivers HD content). And the pay-per-view model works really well for how I like to consume video content.
The trouble is that the iTunes store doesn't have every program and, notably, got in that whole snit with NBC Universal last year. So there was no Battlestar and I had no cable. So I turned to BitTorrent and my Battlestar library is littered with DivX/XviD files that won't play on the Apple TV. You can convert them to mp4s which will play in iTunes/Frontrow. And you can convert those to files that should play on the Apple TV ... but they don't.
This became a bigger problem after I moved earlier this month. With my new setup it was no longer possible to plug my laptop directly into my TV. Or at least not without dropping down to using S-Video. So I pretty much assumed I was screwed until I read Nelson's post on playing DivX/XviD content on your XBox 360.
This totally works. You just add your DivX content to Windows Media Player on your PC (I have one!) and then share that wirelessly with the 360. Completely easy. I was shocked.
I don't entirely understand why Apple doesn't have better native support for DivX/XviD at this point. People will still go to the iTunes store to buy stuff because it's convenient and great quality. You could at least let the stuff be easily playable.