Since the release of Mountain Lion for OS X, I've been using an application called AirParrot to mirror my Mac on my TV (AirParrot is free for a limited trial period). Mountain Lion doesn't natively support mirroring on my three-year-old MacBook Pro, but this application will bring one of the coolest OS X Mountain Lion features to older machines like mine...
I turned to AirParrot, without really expecting it to work very smoothly - but it performed without a hitch. The application streams video and audio without lag (in 1080p to the AppleTV 3), and allows you to use the entirety of your TV screen. And, get this - it even works on PC!
There are a ton of other media streaming systems out there: Roku, the Boxee Box, even your Playstation or XBox. But Airplay Mirroring really makes the Apple TV worth it. For only $99 for the Apple TV, plus $9.99 for AirParrot, you can really play anything on your TV with next to no setup and truly on the cheap. It's especially worth it to be able to play absolutely any streaming video content on your TV - the Olympics, for example, which weren't available via any standard media center service. And, if anything, it will really streamline the look of your media center if you replace whatever devices you use with a single AppleTV.
All you need is an Apple TV (version 2 or 3), a Mac running OS X 10.6 or a PC running Windows XP, and AirParrot. How well it works on your particular machine will probably vary, but if you already have an AppleTV you can at least give the demo a try. Bonus: you can even use your TV as a giant extended desktop!
(image: linked in article)