Just a quick note that on my ATV 1 w/ Leopard 10.5.5 I'm finding pretty good success with the Hulu Desktop (Hulu - Labs). Hulu says you need a Core 2 and 2G of ram but what I'm doing is running with the screen set to 720x480 and locked the bit rate into the medium speed (~700kbps).

I've spent some time making sure that all extra services are disabled and am running the beta adobe plugin (Flash Player Developer Center | Adobe Developer Connection).

I'm also finding XBMC runs great with a screen resolution of 720x480.