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XBMC is only useful if you have no need for hardware (GPU) acceleration.
That being said, XBMC with the MediaStream skin is downright sexy.
If you are running Linux, OpenSolaris or FreeBSD you can do experimental h264 gpu acceleration with vdpau and the latest nvidia drivers. Last I looked it had no soft sub support yet but its getting there. What I'd really like to see is good multicore decoding since pretty much everything is dual core these days.
Personally I prefer the Aeon skin.
Yea, but what kind of person wants to run Linux as a HTPC...?
Cheap, flexible, and stable; why wouldn't you want to run linux if you know how?
Ahh there is the catch...
Needlessly complicated and confusing. There are far easier options that take little to zero configuration. But hey, if tooling around in the command line gets you off...