What started out as a thread on the somethingawful forums has progressed into a veritible orgy of Apple TV hacking- Xvid support with Perian, external USB storage, bluetooth, people monkeying with the screensavers in quartz composer.. in fact so much is going on it's becoming difficult to track. Apple's YouTube update set hackers back a bit- it didn't shut them out completely, it just removed a lot of the superfluous bits of OS X that were making hacking in extra features so easy. Luckily AwkwardTV seems to be tracking the majority of the hacks and plugins as they spring up (after briefly being Digg'd into oblivion). I need another few hours to parse all this information before I start modding my AppleTV, but if it saves me all the time I've been spending transcoding XviD files, gives me subtitle support, and lets me play my HD files without waiting a whole week to convert them to a format that may or may not play on the AppleTV, I am there.
(There's a good compendium of command line hacks here as well, make sure to check whether or not they work after the YouTube update though.)