TUAW had a chance to test app that uses H.264 encoding to build a live video stream from your selected display.
AirParrot is still in its early days. As yet, there is no subsampling (i.e. you cannot just pick a portion of your screen to mirror) and no audio mirroring. Stability can be a bit iffy as well and the developer is still working on a way to keep the Apple TV from going to sleep while mirroring. Built-in options allow you to control underscan (fewer pixels overall, so more encasing black space but better responsiveness) and compression quality (choose from low to high).
The app is super useful for anyone who works in groups or in front of audiences. If you can live with the early adopter drawbacks, it will well be worth your money.
You can read more about TUAW's experiences with the AirParrot here or hit the link below to purchase it for $9.99.