I've read through some threads on home theatre setups but im still not sure which option to go with for a home theatre set up.
The main function i am after is streaming of my movies on my imac in my bedroom to the living room LCD TV.
I was going to get the Apple TV but the lack of divx support has turned me off buying that. Any suggestions please?

Get the new netgear box for HD media streaming. For approx the same cost as an appletv and infinitely more usable

Well, you could put a Mac Mini with Front Row and DivX installed in the lounge, share the Movies folder on the mini with the iMac and just drop your content into there, which is what I did initially. Or you could still get an AppleTV and just use iSquint to convert from DivX and XVid to MP4.

Eventually I just started converting my DivX video to MP4's and adding them to iTunes, so I didn't always have to go into Movies and then a bunch of sub folders to find TV shows. It just meant that I could use the options already in the Front Row interface. Sure, it's an extra step...but to be honest it makes things simpler for viewing.

If you're game you could have a go at hacking the appletv for divx/xvid support.

Thanks so far for the advice

The mac mini could double up as a dvd player as well but its too expensive and has less storage

Converting the files to MP4 is an option

Anyone think apple will add divx support?