Well you could also consider the Asus O! Play Mini which is on ebay for about 3.6k. No built in hard drive, but IMO that's a good feature. Plug in a usb stick or an external HDD every time you want to watch a movie and if you do have a separate hard drive for media it remains portable independent of the media player. Add the cost of a 1TB external drive and total cost should be about the same. Plus the asus is supposed to have great support for a lot of formats spl Dolby and DTS for audio.
Err if u are looking for a quality media player then iomega is a bad place to look... WD Live & Asus oplay are your best bets... If u want one with a Builtin HDD then you can go for a WD live Hub with 1TB disk... That goes for around 10K but if you are going that far why not try & build a nice little HTPC with 2TB HDD & the ability to use a computer on your biga$$ TV ... I myself am leaning towards the Mac mini to use as a HTPC with Plex/XBMC installed plus a bit of a gaming device ....
Take a look at Xtreamer Sidewinder or the AC Ryan PlayON HD mini. I think Prime has AC Ryan.I think I once read about this guy who bought this (from THAT dealer- you know whom I am talking about) and regretted it because it didn't play a file type. But it was mentioned in Iomega that it will support- but it didn't. It was on Digit forum.
Plays Blu_ray discs, supports a whole lot of formats (playable via disc or usb), and lets you stream online content too, if your connection allows it. On a decent connection in excess of 1Mbps you should be able to watch 480p (dvd quality) streams. All in all not a bad deal for the asking price.