I assume (if still there..) you wish to build an efficient PC-based system to play BluRay, DVD etc.
Yes, the ATOM "can" playback BluRay if paired with a newer card that has hardware video decoders.
There are several technical issues in building a HTPC which I just don't want to get into.
At present, I recommend getting a Sony PS3, a standalone BD/DVD player or use a laptop with HDMI HDCP output if it.
If the laptop has a fast enough processor it doesn't need the hardware video decoders (aka "UVD") from ATI or NVidia. Currently, on a laptop or desktop, you must software toggle between normal sound and HDMI sound as the HDMI sound is only streamed from the disc and is not processed via the sound card. However, I don't believe all of the newer BluRay sounds can be sent without intermediary processing which isn't available with this method, so this is one of the "issues" I won't discuss further. Of course, you could use this only for media playback but then why not just buy a $250 standalone player?
If you really want to build a standalone Home Theater PC for BD/DVD etc my advice is wait another year as motherboards as PC hardware still has to sort out these issues (not to mention Home Servers are just taking off.)