The article says the project has been in the works for a long time, and the projected price being tossed around is US$99.00! That's a pretty competitive price, but the devil will be in the details. If it's just a vessel to buy from the iTunes store, it doesn't seem a very exciting product.
On the other hand, it it connects to Netflix, as the iPad already does, the whole idea gets a lot sexier. It also will need the content the current Apple TV has, like YouTube, MobileMe integration, podcasts and more. If they add services like Pandora, MLB TV, NBA games and more then they might really be cooking.
Roku already has a $99 Netflix box with some additional streaming services, but if Apple allowed iPad/iPhone apps to be scaled up for TV viewing the whole concept gets really, really interesting.