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AirPlay started out as a way to stream music from iTunes on a Mac to remote speakers. iOS devices later gained the ability to mirror their display to Apple TV. It comes full-circle in Mountain Lion, with the ability to send a Mac's desktop to an Apple TV.
Some iOS games, such as Real Racing 2 HD, can be played relatively lag-free on a television. The output from a Mac is slightly delayed, which is jarring when trying to move the pointer. It's fine for mirroring movie rentals in iTunes, though, because the delay is intentional, and it keeps the audio in sync with the picture.
AirPlay also appears as a target in Mountain Lion's Sound preferences. That enables you to stream audio from apps such as Spotify to your Apple TV, or speakers connected to an AirPort Express unit. All of your Mac's audio is transmitted, so it's important to ensure everything besides the intended app is muted.
It's a little disappointing that Mountain Lion doesn't enable a Mac to be used as an AirPlay receiver. Especially so for the Mac mini, which is well suited to a living room setting, and more capable than Apple TV with it.
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