Ask Engadget HD: Best media streaming set-top box?

Let's be realistic, we're not going outside, and 3D isn't quite ready yet, but we've all got video files on the PC we want to get on our HDTV and with new set-top boxes seemingly dropping every day, why not ask the question one more time? We'll let Brian break down his situation:

"I have recently upgraded my home theater and am now rocking a 55" 1080p screen, full surround sound and a subwoofer big enough to use as an end table. But what I don't have is any way to watch a movie that doesn't involve putting a disc in a drive and pressing play. Just doesn't seem right! So what I'm looking for is a decent set top box that has:

1. Internal storage, 1TB at least
2. Network connectivity. Wireless is not necessary, as I have ethernet already run to the cabinet
3. Upscaling to 1080i or 1080p. I have a lot of my DVDs ripped, and if I can encode them in native resolution it will save an enormous amount of drive space over upscaling them to a size that works on the big screen
4. Support for all the usual video formats, especially h.264
5. Responsiveness. This is important, I don't want something that's frustrating to use

Oh yeah and price. I don't have a rock solid limit, but I'd like it to be less than $250 without storage or $350 with it. There are so many options out there I'm not sure where to start. So, what do you think?"

So Brian wants to go all digital with his movie watching experience, we're sure more than a few of you have or are thinking about a similar setup, what do you suggest?

Got a burning question that you'd love to toss out for Engadget HD (or its readers) to take a look at? Tired of Google's blank stares when you ask for real-world experiences? Hit us up at ask at engadgethd dawt com and keep an eye on this space -- your inquiry could be next.