AppleTV was released over a year and half ago and has been a moderate success. It is a device with great potential, unfortunately most of that is left untapped due to Apple's desire to maintain strict control over content. Apple limited the devices playback to certain video formats: H.264 and MPEG-4. Most techies that I know have videos encoded in more than just these two formats. This restriction has a significant impact on AppleTV's appeal.
Shortly after Apple TV was released, the hacker community started on making it better. Since that time, the hacking community has accessed the operating system, enabled playback of most video formats, allowed DVD playback, installation of Firefox, Skype and EyeTV and much, much more. These "new" features make the Apple TV much more attractive as a digital media receiver.