This weekend, I spent some additional time playing with Theater View. I also sat my wife down and let her use it completely unguided, as a test. First of all, she was very enthusiastic about the new functionality. Thrilled and quite impressed, so I think you get a "good job" from her as well.
However, it did starkly and quickly reveal a few issues. Most of these were discussed fairly thoroughly above by others (especially park and rpalmer). Basically, it boils down to two major things.
1) There is no way to tell which view is currently active when you open on of the main "top-level" Theater View sections (audio, video, or images), and likewise there is no intuitive cues that there is any way to change your current view.
2) The Top Roller has a weird hybrid functionality and navigation using it isn't intuitive. "Play All" is badly named or contains way too many unrelated functions, the top roller is used sometimes for navigation and sometimes for other controls and configuration, and the Breadcrumbs Roller (separate from the initial Views roller shown) is not used for anything at all. The breadcrumbs roller also hides itself when you have your highlight on the file/categories list area, which makes it hard to tell where you are in the categories hierarchy without going back up to check manually.
I see these issues as somewhat related. I agree with many of the posts along these lines above, but I thought it might be useful to put together a coherent suggestion for solving both of these issues.
To solve issue #1 above, I suggest that the Secondary Roller be made permanently visible, or (at the very least) this should be the default configuration (allowing skins to auto-hide it). I understand why you want to hide it to preserve the clean, simple UI. However, this is making the interface more confusing as-is, particularly to less-sophisticated users.
Like many others, I have specific TV Show, Home Videos, and Movies video views in Theater View. My TV Shows view contains the Series and Season categories, and filters the list to show only TV Shows. Other views work similarly. Actually, this brings up a second (unrelated) point... Why are the default Video views that MC comes with effectively completely useless? It just feels like Video isn't getting any "love" here. MC should have, imho, at least those three views by default in both Standard and Theater views.
Either way, the first issue my wife saw immediately when opening Theater View and going to Video was that there was no way (apparently) to get to the Movies. I had last used the TV Shows view, and so it auto-opened Video in that view. However, because the skin doesn't show the second roller by default, there was no visual cue that there was some way to change this and that there were other views available. There was no way to tell intuitively that you were in the "TV Shows" view. So, that was the first question I had to answer. Once I showed her this, she immediately said "well that's silly, it should always show that row (meaning roller). How am I supposed to know that?"
The second issue she ran into immediately was that she got "lost" occasionally when navigating around in the TV Shows View, due to the lack of the visible Breadcrumbs. This isn't an issue that I had regularly, but she hit it nearly immediately. After thinking about it a bit, I figured out why, and why some Audio/Images-centric users of Theater View might not regularly hit the issue. When you are navigating a standard Audio Genre/Artist/Album view scheme, the Thumbnails contain a lot of "useful" information. Even when you've drilled down into the Alternative Rock genre, it is easy to intuitively tell where you are by the artists contained within. The thumbnails displayed give you a very easy-to-grok visual cue as to where you are. Furthermore, when you drill down into a particular artist's album, you can tell immediately that you are looking at the albums from that particular artist (via the thumbnails) if you know that artist's music at all.
In a Video TV Show view, though, this is quite different. Once you open a particular Series, all you are presented with is a set of all very similar (or often identical) thumbnails with numbers (1, 2, 3, 4, 5) for the different Seasons. "What show did I open?" becomes a common question for people who navigate slowly and sometimes open the wrong thing (many computer novices). The only way to figure it out is to go back up to the top and you lose your current highlight position. This becomes even worse when you navigate into a big list of shows (down to the file level), which all have names and numbers but it isn't clear what Series they're from.
Even in Audio, she occasionally got confused. She'd be in the Genre view (the default, I haven't changed my Audio views at all except to remove a few that I won't use). She'd drill into Psychedelic Rock. Play a few tracks by Pink Floyd (or whatever). Switch it to Display View to watch G-Force for a while, then switch back to Theater View to pick something different. It'd remember where she was, and she'd drill back out to the Artist list (but not all the way to the Genres list), go down and arrow down through the list of artists, and then wonder why she couldn't find the Beastie Boys or whatever. I'd have to remind her that she was in the Psychedelic Rock genre and she needed to go back to find the proper Genre. Again, if the Breadcrumbs were always visible, this would solve the problem (or at least mitigate it).
Likewise, I had to explain manually that hitting the left arrow would jump back to the top roller and then hitting it again would go "back a step".
I think all of this can be solved easily by taking these steps:
1) Always show the Secondary Roller, including when Breadcrumbs are visible there, at least by default with the default skin.
2) When in a Particular view, include the name of this view (TV Shows, Movies, Genre, Artist, etc) at the far left side (root) of the Breadcrumbs once you've drilled into a sub-category. That way, you can always tell that your browsing by Genre or TV Show even when drilled down a few levels.
3) Change the navigation slightly so that hitting Left Arrow from the file list jumps you to the Secondary Roller (Breadcrumbs usually) instead of the Top Roller. A second press of the Left Arrow would work identically to the current system, except that it would be obvious (from looking at the Breadcrumbs) where it would take you. So the Top Roller would be used ONLY for controls, and the Secondary Roller would be used ONLY for navigation. They'd be clearly separate and easy to understand.
Change number 3 above actually also presents another useful opportunity. You will no longer need the "Back" option in the Top Roller at all! Therefore, it would be easy to add a new "third" button to the Top Roller and move some of the commands from under "Play All" over to this new button. I'd still keep the "top level" view name in the middle (Audio, Video, or Images). That's nice how it is. But it'd be easy to move some of the other commands over to a new "Controls" (or "Options" or "Commands") button on the left (where Back is currently). There's just way too many un-related controls under that button. I understand that you don't want to add too much complexity to it (good plan). This way would allow you to keep the Top Roller to a max of three items, but still allow you to break out some of those commands into a separate "set".