My experience is that the video is of surprisingly good quality. Neither Google nor Apple can overcome shortcomings in production, so some flaws are unavoidable. However, for what seems like a tiny video put up on a big screen, the video is extremely watchable. I put this through an extreme test, because I viewed it from a projector on a ten-foot wide screen.
Don't expect HD quality video out of a resolution that is a quarter of that of analog television. However, AppleTV is designed to upscale videos very effectively.
There is some softening for things like text, but videos did not the display boxy areas that I see in my digital cable broadcast. The sound remained good quality, and the videos did not pause and sputter while they streamed.