I've spent the last month or so loading all my music into the ATV, then adding a Cambridge Audio Dac Magic, and just this week a Wireworld Supernova 6 toslink cable to join them. To utilize the HDMI signal from the ATV, I also replaced my old computer 17" CRT with a glossy hp 21" monitor that looks just great. The display senses which signal is active (HDMI or DVI from the PC). Internet videos and vacation picture slideshows look just great.
Its sounding really good (though a bit different than my CD players), and (for me at least) the cool factor is pegging the scale.
I also found the Liberty radio station. With good beer in hand, I couldn't be much happier.
Chris