Actually I just came across that
WD TV Live unit in a search yesterday, as well as a few others all at Newegg. I decided to try this unit which supports FLV directly:
ASUS HD Media Player O!Play HDP-R1 HDMI Interface - Retail
I'm about to purchase an LCD HD TV which has HDMI input of course, so if this player works out and I have good quality I won't need to bother with Blu Ray, at least for a long while.