Running 2 Raspberry Pi's with OpenELEC beta 7 (XBMC) on them...
So far, I haven't had too many issues, and it plays back all my media from my NAS flawlessly! You can tell the software is still in its infancy, things such as video not scaling the way you tell it to (example: if you want to stretch 4:3 encoded video to 16:9), and a lot of add-ons aren't working... but, you can also tell that it has huge potential, and once everything is ironed out it will be an awesome media player for 35 bones!
I ran into a snag with my bedroom tv, its a older sony 720p lcd. the pi didn't know what to do with the sound output... I had video with my mkv's, but no audio. It was driving me nuts, because the same pi with the same hdmi cable etc, etc, worked on my panny plasma with out issue. Then I searched the pi forums and found that I needed to "force" the hdmi output mode via a simple command in a txt file located on the root of the sd card, and voila, it worked perfectly.
Oh, I also tried Raspbmc, and as of this writing.... OpenELEC is better IMHO.