But for $300? You can get something similar (although simpler) for less than $100:
http://www.linuxdevices.com/news/NS6372429785.html
I'm planning to combine the latter with Boxee to create my home entertainment system.
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You're looking at 200 MHz for that system, as opposed to 1 GHz for the basic Fit-PC2 and 1.6 GHz for the high range one.
And remember its the Atom that it's packed with. Feedback from EEE users have been that video playback is pretty decent
Reviews of Atom-based boards I have seen show that it doesn't do HD content well at all. 720p is hit and miss, and 1080p is just a no-go.
So it'd do DVDs and divx/xvid for you, but to play Blu-ray and mkv files you'll probably want to wait a bit and snag the new Nvidia ION platform, which pairs an onboard Geforce 9400 with an Atom CPU, and does full 1080p video with only 20% cpu utilization.
Also remember to divide Atom clocks by 3 when comparing to Core 2 (as a rough estimate, I choose Core 2 because most people are familiar with them). A single core 1.6GHz Atom might compare to a Core 2 at 500MHz using only one of its cores.