So if you install Perian you can play Xvid, but what about HD Xvid? For me that would be the only reason to upgrade from XBMC. For example, can it play a xvid of around 800mb e.g. an epsiode of Lost at 720p without dropping frames? XBMC on a regular not cpu modded xbox can't. The question was asked on something-awful but no one answered.

I'm not sure: no one seems to be trying that, although it's a very, very valid question. I'd say, however, that it should do so perfectly because the AppleTV has a better processor: not only is it 33% faster, but it has a Pentium M architecture, not a Pentium III one. Hence, real-world speed gains hould be much higher than the clock speed increase.
So in theory right now, I'd be willing to bet that it can.

Yes, with a bit of hacking.

Basically, you take out the HD, add the Perian component to the quicktime, then put the thing back in. It worked for a few.

http://forums.somethingawful.com/showthrea...hreadid=2391956

we already knew it plays xvid, but does it play HD (720p) xvid with ac3 sound? ... even more important, does it play mkv(matroska) h.264 with ac3 in 720p at high bitrates (10mbit) without skipping?

someone on irc said it does play hd xvid with ac3 without skipping! Mind hd xvid isn't 720p its around 650x350 and can be scaled up to 720p and still look great.