Have you looked into products from Popcorn Hour?
I've got the A-110, and will soon be upgrading to the A-210.
It's EXTREMELY simple to use, will play just about anything, has a great supportive community of developers, excellent support system, etc, etc.
You can either connect it to your home network and map it to a computer, or you can install a hard drive into it (which is what I did) and then load files you download onto it through the network or via USB drive. It plays 1080p flawlessly, supports things like Netflix, YouTube, and other online services.
MacMini starts at $699. Or you can get the A-210 for $199 + $100 1.5TB hard drive, still less than half price.
Seriously, everyone that I have recommended these products to absolutely loves them.