I tend to think of Apple TV as an accessory for your TV (though Apple is billing it as a 'DVD player for the 21st century'). Apple TV is designed to work with a widescreen HDTV (though it will work with a standard def TV). Since the world of HDTVs is scary and confusing to many people (including yours truly) I thought I would point everyone to Jonathan Seff's great write up on picking the right HDTV for your Apple TV. You're bound to learn something about HDTVs, even if you're not getting an Apple TV anytime soon.
If you want to learn even more about HDTVs, and related technology, be sure to check out our sister blog EngadgetHD. Those guys and gals are crazy about HD.