I've tried the Neuros OSD which is an open-source media player than can pull content from USB attached devices, from network shares, or from uPnP servers. It supports MPEG2/4, JPEG, YouTube, etc. Negatives are that there is no built-in wireless (you can add it with one of the USB ports) and no suppport for subtitles files.
I've heard that the XBox is great for this BUT that it is very noisy.
I've had the problem with the Neuros OSD and with other media players that they aren't nearly as robust in their handling of video formats as a PC with a media player like VLC. In other words, I download or encode something and find it plays great with VLC but then it doesn't work with one of these dedicated media boxes.
So, the best media player is probably a small, quiet PC with Windows or Linux and VLC, and a wireless keyboard. But this will cost more then the other solutions.