The first few rounds of network media streamers we tested weren't necessarily recommendable. Sure, this was partially because most of these devices depend on Windows Media Center for connectivity and content, but we also had issues with their interfaces and performance.
Fast forward a year and it's safe to say that network media streamers have officially hit their stride. We recently took a look at Netgear's Digital Entertainer Live and really enjoyed its addition functionality beyond playing network-connected media. With the WD TV Live, Western Digital offers a very similar package with a slightly better interface and file compatibly.
The WD TV Live is nearly identical to the WD TV HD Media Player, which we reviewed earlier this year. The only differences between the two, and they're significant, are the WD TV Live's networked streaming and Internet playback features.
The unit itself is small and can either be positioned horizontally or vertically--but regardless, it won't take up a lot of room in your entertainment center. You will need to provide the device with power and a wired internet connection, so plan accordingly.
On the rear of the WD TV Live is an HDMI and optical audio out, along with a composite and component out too. Western Digital also includes most of the wires you'll need to hook the device up to a television except an HDMI cable. Also around back is an Ethernet port and one of the system's two USB ports. The other USB is on the side of the box.

Both USB ports read every storage device we threw at it, including portable hard drives, USB thumb drives, and card readers.
We really liked the slick onscreen interface that the WD TV Live displays. It's very intuitive and logically laid out. It slightly resembles the PlayStation 3's cross-media bar in which you shuffle through the types of media that you want to play. From within each category (music, video, or photos), you can then navigate from what source you'd like to play media.
While this setup is great, we do wish you had the choice to first pop into your USB device then pick out a file among various media types. That said, being forced to choose the type of media first, then the source isn't a huge hindrance. Other than USB drive, each media category lets you choose other sources such as network drive or media server; we'll outline these features a little later on.
In terms of file compatibility, the WD TV Live should have you covered for most of your playback needs. The list of file types is lengthy. Note the impressive amount of photo file formats; usually these devices only offer JPEG.
Audio: MP3, WAV/PCM/LPCM, WMA, AAC, FLAC, MKA, AIF/AIFF, OGG, Dolby Digital, and DTS.
Photo: JPEG, GIF, TIFF, BMP, PNG