I’d say some Chinese streaming services are really good. I’ve been using the sohu and PPTV iPhone and iPad apps and stream it’s video to my Apple TV. They used to have lots of western movies and TV shows in 1080p. I don’t mind the occasional 60 second advertisements before a movie/episode starts playing. Sure some of these services have horrible websites, but the mobile apps are usually really good. Streaming from Chinese services is especially convenient when watching with Chinese friends who want to watch with subtitles. When downloading I have to get subtitles manually.
Never used the apps before but the websites are a huge pain. Advertisements everywhere, searching for anything doesn’t work because the names are in Chinese (sometimes there’s more than one Chinese name for a single show), quality is bad, etc. Even streaming “HD” on PPTV doesn’t look great for me, maybe it has to do with the content that I’ve tried streaming. I wish I could stream the World Cup in HD but otherwise I’m happier entirely avoiding the Chinese internet.
You mention you have an Apple TV, it might be worth your time to look into setting up XBMC. I run it on an Amazon Fire TV which costs about 600 rmb on Taobao. There are multiple content streaming services that work through XBMC (like “Genesis” which apparently streams thousands of movies and TV shows, although I haven’t tried it). I use it to play movies and tv shows that I’ve downloaded, and getting Chinese subs for anything takes about ten seconds, it’s all automatic.
If I were in the states I’d probably use Netflix, but in China I think downloading content is still best, for now. I recently stopped downloading music and started paying for Spotify and it has been pretty amazing. I look forward to switching to streaming all video content one day, but for now the selection is too limited and the quality doesn’t come close to downloaded HD movies and tv shows.