I was just thinking - rather than a set-top box, a better 'bang for the buck' might be the right blue ray player. I have a Toshiba that will play all manner of movies (mp4, mkv, avi etc) from it's usb port as well as music and photos. Be sure to do a little research though and get one that has this playback functionality. In my experience, both Sony and Panasonic are NOT good in this regard but there are probably lots of brands that are.
The advantage to doing this is that:
1. you'd get a great picture (1080p would be no problem) and sound
2. very easy to hook up (1 hdmi cable)
3. you could rent or buy and then play blue ray movies (or dvds)
4. you wouldn't have to be constantly attaching and unattaching your laptop to the tv
5. the laptop would be available for people to use while you're watching a movie