I like converting everything to h.264... makes things easier in the long run (plus, I don't even like downloading stuff anymore, I prefer to convert or buy it).
However, even if there is no App store on the ATV anytime soon, you can use the VLC app for iPhone or iPad and use Airplay. I did load an old AVI movie of a crappy horror movie from the 80's (but one that I enjoy a good deal) and used Airplay on the VLC app for my iPad. Right now on the 4.2 beta, it's only audio (unless I'm missing something), but when the official release is out, it should do video and audio.