I know this is not ideal for you, but for others..
If you already own an XBox or PS3, there is a FREE solution that includes video playback, but again you need a PC running. tversity.com
Wasn't super easy to get working but easy enough for most anyone to muddle through if you don't mind going back to their web page for some FAQ reading. I am now using it as a server to stream all my music, pictures, DVD movies and concerts, Jeep run videos, etc... via the PS3 in order to play them on my TV and Axioms. I was just using Windows Media Player for this but switched to TVersity for two reasons.
-- WMP only worked with my MP3s but TVersity will automatically transcode my FLAcs to PS3 acceptable WAVs so they remain lossless.
-- WMP doesn't transcode native DVD files so you have to manually convert any video files that are not natively supported in the PS3 (like DVD's VOB files). TVersity will automatically transcode (transcode = on the fly, real time conversion) any kind of video file so that it can go directly to the PS3 without first manually recoding it to a new format.
All the transcoding is figured out automatically for you , so you don't have to be a media file expert to get them to work. This is a nice feature for many because there are so many file types it can be very confusing.
It has some other neat features that I don't use so much like podcasts and YouTube access. It also acts as a PVR if you connect it to your cable box but my BEV receiver already does that for me.
For you Bluray people, the new Nero product, version 8, does all this transcoding work as well AND handles Bluray but you have to pay for that software. I'm also unsure about HD audio support but maybe it is there?
TVersity is a great media server for zero dollars if it suits your setup, like having a PC turned on.