Unless you actually use the stuff built into the ATV 1 default Apple interface you will only gain XBMC features by switching to Crystalbuntu. I have a Revo, ATV1 (with CrystalHD card and Crystalbuntu), and an ATV2 that is in regular use at my house. The ATV1 with CrystalHD card and Crystalbuntu pretty much holds its own against the Revo in every regard.
I used to run my own ubuntu install on the ATV1 and switched to Crystalbuntu 6 months or so ago. It's a great setup. Sam does an amazing job with it. To be honest it's so automated you really don't need to know much about linux to get it setup and working. Chances are the default setup will work just fine for you, and if not you simply ssh in and run a script which walks you through some settings to change it.
Crystalbuntu is currently running the released build of Eden. He used to ship with pre-eden + PVR support, but has changed Eden to the default. Apparently he's going to add support for nightlies and an eden+pvr build for those who want it via a configuration script.
I'm sure you can replace the default ATV install later on (although not via the built in factory restore since that's all removed). I highly doubt you'll want to.
Yes it supports the CrystalHD card

. With full 1080p output unlike when using the default ATV1 OSX install.
Another option is openelec, although I haven't tried it. Crystalbuntu works so well I really have had no reason to try another option.
The crystalbuntu installer will build a USB stick that runs by itself so you can try his build without mucking with the hard disk. It'll be slower, but it should give you an idea of what to expect. After you realize it's amazing just pop the USB stick back into your computer and set it up for a hard disk install and run it on the ATV1 again.