Plenty have already been written about the Apple TV, on how its features are limited and will be a massive flop to how it will revolutionise TV viewing. I think I agree to both point of views, because how you feel about Apple TV depend heavily on what TV is meant to you and how it fits into your life.
From the traditional TV viewing point of view, Apple TV is a strange beast. It is not a DVD player or a DVR, so it is not about replacing a piece of equipement that we already own. Apple TV 'merely' plays content from your computer on your TV, be it video purchased from iTunes Music Store or video ripped from DVD, etc. Nothing revoluionary there, is there?
But if you look at Apple TV from another angle. One where video content are no longer served by the few TV networks and I think this is where Apple TV will be the watershed device when we look back in 5 years time. DVRs, and to some extend DVD players, have changed TV viewing for many people. We are no longer tied to the TV schedules defined by someone working at a desk in the network. Now we can record shows that we want to watch and then watch them when we want to. If we take this one step further so now we also control what will be shown on the TV, this is what makes Apple TV so special and may take a while for content creators to recognise.
With video podcasts on iTunes, Joost, and other P2P 'sources', we are no longer tied to content any more. We are now empowered to find content that we want to watch when we want to. Of course many people have been doing this for a long time but it is not simply a few clicks of the mouse button and most consumers neither have the skills nor the time to find content this way. Apple TV, I feel, is the device that will bring consumer awareness to the possibility of decentralised TV content. And this raise in awareness will finally force content providers (TV networks, movie studios, MPAA, etc.) to realise the old model can no longer be the only model. The cat is out of the bag and if the content providers want to be rewarded for content they created, they need to help us find content that we want to watch, not actively blocking us and force us into the old revenue streams (TV, movie theatres, DVD).
I causally mentioned to my friend at work who is also an Apple user that I may get the Apple TV when it is finally out. His reaction was, "What? Why would you want to watch video blow up?"
I explained to him that I want to watch my video podcasts on the TV instead of in front of my computer, despite the fact I have a very nice 24" LCD monitor. My friend just rephrased his question and wanted to know why I would want to watch low resolutions video on my 46" HDTV.
Then I realised that he thought all the video podcasts on iTunes are sized for the video iPod. He did not know some video podcasts are in hi-def, such as MacBreak which is in glorious 1080p. Others such as Diggnation and Merlin Show are in decent quality 480p which should scale OK on the big screen. But the most important of all are the TV shows that we've bought from iTunes: Smith, NOVA, etc. which we would not watch unless it is easy to put onto the big TV.
Yes, there are cheaper ways to get video from our macs to the TV but Apple TV takes the hassle out of the whole equation. Do I really want to figure out how to stream video from my Mac Pro to my PowerBook (probably using VLC), then onto the TV using S-Video (i.e. no HD)? How would I control the playback? Certainly not through a remote control and an onscreen display that Apple TV would provide. Do all these worth $299? To me definitely, probably not for most of you geeks out there. But then, I just want to watch video from my computer on my HDTV, not doing my annual geek certification exam.