To be precise the hardware is outputting 720p, but XBMC can decode 1080p files and scale them down. I'm not sure if the output can be hacked or not, but the developers claim it's "not a priority" at the moment.
[1] Note that I'm in EU-land, where AppleTV is 120 EUR, which is 160 USD. Acer/Asus/Zotac/other nettop vendors do not have the same problem with currency conversion that Apple does.
Apt-getting installs/updates to XBMC rather than jumping through whatever hoops you need to for this is a blessing too.
One downside, you'd need to buy a 3rd party remote and USB-IR receiver and get it working with Ubuntu/XBMC. (At least I did, I think the newer version has one built in).
I used XBMC for years, but boxee is just a nicer experience for an Internet connected HTPC imo.