There's a lot of nifty things you can do with a second generation Apple TV, but if you've got the third generation model, you're stuck behind a seemingly impenetrable anti-jailbreak wall. Or at least you were.
PlexConnect uses the established and much-liked Plex client running on a PC or Mac and a bit of clever coding that disguises itself as the Trailers app that runs on a third generation (or un-jailbroken 2nd generation) Apple TV. You point the Apple TV at the software, and you're up and running transcoded video directly via your Apple TV.
It does involve a little bit of terminal work, and I'll say upfront it's experimental and I haven't been able to personally test it, but it's still got a lot of potential for those who like their content at full 1080p resolution. Something tells me that an arms race just opened up between the developers and Apple, too.