I'm just going to add
I'm just going to add a little supplemental info here, after having a chance to look at the specs for the ATV3 a bit more. I have some serious doubts about whether or not this thing would have enough processing power to handle much beyond DVD level files unless they were encoded in very specific ways which the A5 CPU used in the device is optimized to handle.
You can almost certainly forget about ever being able to decode a 1080p rip of a bluray disc if you ever wanted to start adding those to your collection. I would question whether it's enough of a system to be able to handle even a 720p bluray rip.
You'd probably be better off with something like WD's TV Live thing, the Asus O!Play, or one of the dozen or so other set top boxes out there, if not just picking up a low end laptop with HDMI output. You could even build your own low profile, low power, HTPC box that runs Linux and boots straight into XBMC. The ATV hardware is designed specifically for use with certain formats, which naturally is pretty much all you find via iTunes or Apple's software. I wouldn't expect it to go well if you tried throwing other formats at it.