So for watching movies and so forth, would you say the R2 is better than the xds?
The XD|S is actually a great device. If you are going to stream mainly from Netflix, this model doesn't utilize adaptive streaming. It's a good and bad thing because you will always get HD in terms of PQ (more or less depending on your connection) as long as the content is in HD. If your download speed is not that fast, you may experience frequent buffering on Netflix.
On Roku 1 Netflix goes only as much as 720p and not 1080p(please do correct me if I'm wrong). And since it runs on a different software version than the Roku 2, you won't get closed caption or surround sound from Netflix on the XD|S.
Good thing about the XD|S though is that it is dual-band wireless-N so you can connect it to a 5ghz wireless network, provided your wireless router has that capability. That means less interference and faster connection wirelessly.
If I were to suggest a player, I'd say go for the Roku 2 XS and buy an extra remote(Infrared) as an accessory since the bluetooth remote usually takes a lot more juice so changing batteries(more than once a month) may be a bit troublesome to say the least.
You'll get an ethernet port, USB drive for your saved videos, closed caption and surround sound on Netflix along with the adaptive streaming feature and probably kick in a 2gb micro SD to make your player run smoothly even if you install 30+ channels and a few games(or 50-80+ channels if you remove some of the games).