I finally picked up a WDTV live to hold me over until I build a new rig. I really am digging the picture quality on my Panny and the fact that I can click on a BD .iso and it just plays, with DTS MA audio to boot, is fantastic. Much easier than fiddling with my DLNA server. So far it's played everything I've thrown at it, .mkv, , m2ts, DVD file structures, avi's etc.
As others have mentioned I'm not a big fan of the slow-to-respond menus, but I'll take that in trade with it's ability to play so many different formats. While it was a bit cumbersome to get it working properly in my domain environment, once that was sorted it has been able to connect and stay connected to all my shared resources across the network. (Using the first 'word' in my domain name in the workgroup field and giving the WDTV live its own user account and making that account a local admin through a GPO on machines holding shared resources with a simple password consisting of only letters and numbers seems to have eliminated all the initial connectivity issues I experienced once share and security permissions were sorted.)
I would like it if it had the ability to add more options in the way of apps, such as being able to customize it much like XBMC, but for now it will work until I can build a new PC and relegate the old to HTPC duty. I have played with XBMC a little, and it seems it would take quite a bit more work to get everything to play as seamlessly, but I'm sure the customization options would be worth the extra effort.