We've been testing Apple TV for the past 10 days or so, and our verdict is that it's a beautifully designed, easy-to-use product that should be very attractive to people with widescreen TV sets and lots of music, videos, and photos stored on computers. It has some notable limitations, but we really liked it. It is classic Apple: simple and elegant.
Once it becomes commonplace and simple to stream content from the Internet to the TV, the entertainment world changes. You think you have a lot of channels to choose from now!
There are other solutions already, but having a big, trusted name like Apple enter the arena is important.