The audio quality is as good as the encoding of your music. It can be bad, or in my case almost always pretty ok. Most of my music is mp3 at 320. Video is another story - not ready for primetime (bandwith issues). I tried three different ipod docks with my Avant (DLO, AR, Apple). When AppleTV came out, I switched and I find this is the best solution.
I do not have the latest ccdb on my Avant, so I use a Lintronic to control the docks and ATV. Not as simple as the ccdb, but it works.
With IpodTouch 2.0 I can now control the ATV easily from anywhere in the house with full two-way info that include album covers. Pretty cool!