Today I received the RaspberryPi. I already had a 8GB SD card loaded with the official Debian Linux release for RaspberryPi. I hooked power up to the board with a usb charger and micro usb cable (not mini usb). I connected keyboard and mouse to the usb ports; connected my tv with the raspberry over HDMI and had ethernet cable wired to the board. Once powered up the board booted fine and I could start LXDE desktop. I could not find any tool in this build to try the HD video playback capabilities of the raspberry pi board. So I wanted to try XBMC, which is currently in beta for RaspberryPi. I go the download and install instructions via links from this page. I downloaded Raspbmc image and copied it to my SD card using Win32 Disk Imager tool. I booted up the RaspberryPi and it took about 5 minutes for the setup to download required files, install, format the SD card to take advantage of the full capacity etc. Then I installed the Youtube video add-on for XBMC and search for some HD movie preview clips to try on and WOW the quality was great and it plays quite smoothly. I will probably post a video on that soon.
Overall the RaspberryPi is not a bad piece of hardware for $35 price tag. You should not expect fast response from it considering the limited amount of RAM it has and currently clocked at 700Mhz (over clocking up to 900Mhz is possible). However the H.264 video playback is quite stunning. People are busy building a lot of cool stuff with it and I am sure in no time we will have plenty of hardware mods and software tools for RaspberryPi too.
Update: I made a video of the RaspberryPi running RaspBMC and 1080p H.264 video. I had a wireless mouse/keyboard receiver on one USB port and a 4GB USB flash drive on the other. The video file was on the USB flash driver.