Yes I have one.
As far as I know it only streams from iTunes. The new version can directly stream from the online iTunes store as well (podcasts, movie rentals). The Apple TV does have a hard drive built in, although I don't use it.
I use mine for watching podcasts (both from my local iTunes server and from the online iTunes), watching movies (ripped from my personal DVD collection), watching tv shows (purchased from iTunes store), listening to my music collection (streamed from my iTunes server), and photo slideshows (streamed from my iTunes server).
I currently have approx. 80 GB of music (about 15,000 songs) and 150 GB of movies that I stream to it.
I like it very much. The user interface is very simple, the remote is very simple. My wife and children can use it without help.
The only semi-negative thing I would say about it is that with the size of my library, it takes several minutes to load the libraries whenever it has to reload (because it was disconnected or something). I can only guess that this is because it is reading the actual movie files to get thumbnails from the opening shots.
I bought mine primarily because I wanted to be able to play my iTunes purchased music (re: copy protected AAC files) using a friendly UI on my home stereo/tv.
I'd be happy to answer any questions. It may be a few days before I check back here though.
Mick