You don't need to use iTunes. Mountain Lion and a newer Mac can mirror their whole screen natively. For older Macs or Windows PCs there is the third party software "Airparrot" (10 dollars).
Short VLC demo with 1080p Apple TV:
http://www.youtube.com/watch?v=L0lM_R7LQ0Y
For Windows:
If you're like me, it will play about 10% of my collection. WDTV Live, on the other hand, plays everything.
If you're in the Apple eco-system, Apple TV is great. For those who aren't, it's Apple's way or the highway. I'm half in Apple, half out of Apple, and it's a total nightmare.
But you are right that there are other boxes available and they all cost way less than $250.