I dunno, without nvidia gpu, atom cpu isn't strong enough to do 1080p (Yes,Even pine trail can't - only 720p).
They could have used a cheaper Broadcom decoder chip, but I doubt windows 7 aero or Flash could use it....
Best Atom based HTPC are already here, it's called ION platform and you can get pretty slick one, with hdmi/1080p etc for $300.
Run your favorite flavor of OS and XBMC/Boxee/or any other branch and you are all set with your HTPC needs