As it is, the US$229.00 Apple TV allows you to buy Movies and TV shows through the iTunes Store, look at MobileMe galleries if you subscribe to that service, and play music from your iTunes library. There are links to YouTube, and your iPhoto library. You can also stream internet radio stations and movie trailers.
In the years since 2007, when the Apple TV went on sale, other consumer electronics companies have stepped up and pretty much trumped Apple's solution.
In my own case, I recently bought a Sony BDP-470. It's a Blu-ray player and has access to new movies from Amazon's paid video on demand service. Movies there cost the same as movies from the Apple TV. A big plus is Netflix access, which allows you to stream as many movies as you want. The streaming movies aren't the latest releases, but Apple's store has plenty of old ones as well, and with Apple, you pay by the movie. Netflix now has many movies that stream in HD.
The Sony player includes YouTube access and Pandora, something that the Apple TV lacks. Sony also supports a free app that allows you to control the device with an iPhone or iPod touch. A free software update will add 3D capabilities this summer, but of course, you'll need a 3D ready TV.
The Sony is priced at U.S. $199.00, or $30 cheaper than the Apple TV, and the Sony gets you a Blu-ray player. So far, Apple has ignored Blu-ray completely while the rest of the world moves ahead. The Sony needs an Ethernet connection, but for $50 more, you can get the BDP-S570 that has Wi-Fi built in. In other words, for the additional $20, you're getting pretty much the same capability as the Apple TV with a 3D Blu-ray player thrown in.
Other manufacturers are offering similar features on Blu-ray players from Panasonic, LG, Phillips, Samsung and Vizio.
Apple still says that the Apple TV is a hobby, but I pay attention to my hobbies and keep them up to date. If "hobby" means "neglect," then Apple is doing well. It's time Apple recognizes that Blu-ray is going to be a success and gets the Apple TV back in the ring. Otherwise it could wind up being just an expensive paper weight, if it hasn't become one already. Do you own an Apple TV? Does it meet your needs?