When I tried using a 27-inch iMac as an external monitor for a Blu-ray player ...
Here's Apple's info on Target Display mode: With Target Display mode, you can use your 27-inch iMac with Mac OS X as an external display. Connect any computer or other device with a Mini DisplayPort to your 27-inch iMac using a Mini DisplayPort to Mini DisplayPort cable or using a converter that converts other electrical, video, and audio protocols from another source device to Mini DisplayPort compliant signals. (Cables and converters available separately.) To use a 27-inch iMac in Target Display mode with another computer as the source:
° Make sure both computers are turned on and awake.
° Connect a male-to-male Mini DisplayPort cable to the Mini DisplayPort on each computer. The 27-inch iMac will enter Target Display Mode and display content from the source computer. Note: If you are connecting two 27-inch iMacs, connect a Mini DisplayPort cable to each computer and press Command + F2 on the 27-inch iMac keyboard that you will use as an external display.
° To leave Target Display mode, press Command + F2 on the keyboard of the 27-inch iMac that is in Target Display mode. To return to Target Display mode, press Command + F2 again.
I took a Kanex Mini DisplayPort to HDMI adapter and connected the 27-inch iMac to a Sony Blu-ray player. Then I pressed Command + F2 on the iMac keyboard, but nothing happened. When the super-sized iMac was announced, there were reports that you could use it as an external display for a laptop (which it does fine with my 13-inch MacBook Pro), plus Blu-ray players, DVD players and game consoles. Apparently not.
Guess we'll have to hope that Apple eventually gets around to implementing Blu-ray playback support in Mac OS X.