The *current* apple TV beats airport express. Both have analogue outs (3.5mm on the AE and 2 x RCA on the ATV) and digital out (3.5mm on the AE, normal toslink on the ATV), but the ability to use its storage to avoid having the Mac on is a definite boon.
The *new* Apple TV doesn't have analogue outs, but would be a better bet than the airport express because of its video functionality.