Depends...
I have been struggling with this all weekend
Have had a PC based HTPC for years - have alot of movies in video_ts files. Always wanted a mac mini for a while - ever since Front Row played video_ts files natively (with previews even...). The whole finally able to play my itunes music library seamlessly was a bonus. (My current HTPC is OLD)
However a few weeks back got an Apple TV for the Non HTPC TV (got rid of cable). The Apple TV worked great and everything was fine. Well that was going so good decided to pick up a Mac Mini to replace the aging HTPC in the basement TV. Was going to use Front Row, Handbrake and have it all - video_TS capability, iTunes compatibility, 1/4 the storage drive needed when ripped to .m4v and a simple easy to use interface.
Well ran into one MAJOR problem - can not get dolby digital to pass through into Front Row. Tried the Perian hack and was able to select Dolby Digital on the file - if I played it back in iTunes - But not Front Row

Why there is no audio channel select in Front Row is beyond me. I spent the whole weekend trying to get it to work.
Currently in process of setting up Plex. The program has promise but just too cumbersome. Additionally the inability to play iTunes media bought from the apple TV in Plex is a negative. I know you can activate Front Row from within Plex but it is not elegant and I still have no DD on my Apple TV content.
So then I started thinking about another Apple TV. I could Handbrake my entire collection of video_TS files - stream all those files. Home share the base account with the other Apple TV and away I go. The Apple TV has no problem streaming the movies and playing back in Dolby Digital.
But then I think about the new Mac Mini sitting there and all the flexibility I am giving up - not to mention committing even more to the

Eco System.