I love being able to play video files in Front Row while sitting on my couch using the Apple remote, it's the closest thing I have to Apple TV. The only problem is that because Front Row only plays files that Quicktime is capable of, it's not always possible to play the video files I have stored on my computer as many of them are DivX. But there is of course a solution.
DivX for Mac is a codec that allows quicktime to play any DivX file, and thus allows Front Row to do the same. All you have to do is download the codec from www.divx.com and install it. Once I did this I was able to play DivX files using quicktime, I had to restart my computer before it worked in Front Row so don't panic if it's not working for you straight away.
You still won't be able to import videos into iTunes so if you want to access video files in Front Row you will have to put them into your Movie folder.
Hopefully this will help make Front Row a more useful program for you, it sure has for me.