I got my Pi Zero today. Free with the MagPi mag, must had been lucky as I called W H Smiths yesterday and the guy said he just ordered 15 more since they sold it in the first hour, so he'd hold me back 2. He called this morning and said only 1 arrived!
So I've just been playing with Kodi, latest OpenElec 6.0 build, and it works really well. I dont actually think its running at the full 1Ghz yet, seems to default to 700Mhz currently, I assume its recognised as a Pi1 still. The GUI runs fairly smooth, may struggle on some of the more intensive add-ons and you probably cant run any on the heavy skins.
The USB port doesnt supply much power, I pretty much struggled to run a simple wireless mouse and the wifi dongle through a hub, even the hub plus wifi dongle struggled, however just the wifi dongle worked great.
I was able to stream a 15GB (17Mbps) MKV file through the wifi no problems, well for 15minutes anyway.
The price does add up if you need to buy the extras, which is why I couldnt recommend the Pi2 over something like a Amazon Fire Stick, however with the Pi Zero being like £4, it means you can most likely get a pretty good setup for under £10. e.g. £4 Pi, £4 Wifi dongle, £1 USB OTG cable, £1 Mini HDMI adaptor. You shouldnt need power as the TV's USB should easily power it.