AppleTV is good when jailbroken with seas0npass and then having Plex or XMBC installed on it, via ATVBlack. That way you are not restricted only to iTunes, or having to convert everything to work in iTunes.
Go read at
http://www.firecore.com and make your decision after that. They make the jailbreak simple and painless (and also do OTA updates). Caveat: I do not know if they have yet jailbroken ATV3. I have an AppleTV 2nd version, and I have not updated the firmware to the latest, yet.
[edit] Never mind... Its looking like the best bits of ATVBlack dont actually work (they are calling it ATV Flash) anymore. Plex and Overflow not working, XMBC nightly builds only. Also its only a tethered jailbreak which is fine if you have your computer near your TV, mine is at the other end of the house. And they have not jailbroken ATV3 in any form. Looks like I won't be updating either the firmware from Apple or the software from firecore at this stage.
Recommendation: Looks for a second hand ATV2 with its firmware no more recent than 4.4.x OR get a mac mini.