I do not think they are there yet. I read the review on Anand-tech and he states in his review that there is no digital output at least on the model he tested and they use about 90% of the cpu with a 720p video file. There is absolutely zero hardware acceleration and it all has to be handled via the CPU (Atom). I do not have a link I just google Eee Box and found the Anand-Tech review.
In closing he states that this will not make a good htpc at this point. I would save some money and wait for another model.
Hmmm... well based on our test of the Intel ATOM i945 based motherboard which uses the same chipset and importantly for video perfoamnce the same GMA950 GPU I can say that we dont see anything more than 15-20% cpu usage when playing a ripped DVD at 720p.
Overall performance is really very good indeed and i would not have any reservations about overall performance of ATOM 1.6Ghz based units.
All the best
How plug and play is the Intel Atom i945 you tried?
Did you have to do anything special to get the video to work or was it recognised?