I have a 360 (pre-ordered in August), and it does seem to stream videos just fine, but I have not installed Windows XP MCE yet to try the other functions (such as the DVR functions).
The reason I haven't installed XP MCE yet is because of the one feature I was hoping the 360 would have and the one feature I really want out of my Roku: it cannot stream DVD images, therefore, no DVD menus or navigation. You can only rip the DVD and play it back as a normal video file, as you can with the Roku.
Needless to say, my excitement for the 360 extender functions is subdued, and I probably won't get excited again until they have CableCARD tuners for Windows Vista MCE next year.
Still waiting for the elusive 'perfect' media streamer. The Roku is SO close. If they could just implement the features in the SDK that TheEndless has requested, we could have DVD menus and navigation support.
BTW... streaming DVD image support was specifically excluded by Microsoft because of the implied support of bypassing DVD encryption to rip the images to a hard drive. This was cited as one of the reasons Microsoft is supporting HD-DVD over BlueRay. This type of use would be allowed and supported by the format. Who knows what BlueRay will bring, as everyone is declaring BluRay the winner already. The 360 also does not (yet) support streaming discs from the Sony 300 disc DVD changer/XP MCE that was just released, although it sounds like it might be supported soon.
I have high hopes for this http://www.engadget.com/entry/1234000370051638/
(they are claiming streaming DVD image support with full support of DVD menus and navigation) but it's not available yet and gosh, it would really look out of place with the rest of my equipment (what were they thinking??).
Also, there are lots of rumors about Apple getting into this space in January, but as with all Apple rumors, could be completely false, and could be very underwhelming if you have sky-high hopes. My guess is Apple would have the same issues as Microsoft with DVD image streaming since they want to stay friends of the entertainment industry.
I REALLY want to love the HD1000, I hope one day soon it becomes an important project for Roku again. The lack of support for the HD1000 actually caused me to skip buying a SoundBridge and go with the 'slimmer' competition.
Bottom line (my opinion of course): 360 is great for games, but no need to rush if you want the Media Center Extender features, unless you don't care about DVD menus/navigation and encrypted HD.
Have I rambled on enough now?