Disclaimer: I'm a PC guy, but I appreciate what Apple has done for the MP3 player market and for their polished and (usually) well polished UI skills. Although I'm the only person I know that regularly crashes Macs as soon as I use them.
I was excited about it until I read that it didn't support regular TV and was not a DVR. I haven't jumped on the HDTV bandwagon yet, and the AppleTV requires at least a 480i set.
Personally I believe a MacMini is a better investment as an enterainment device in my HT. Yes, it's twice as much at $599, but along with the FrontRow interface you get a real PC that can actually hold/manage your iTunes library (my understanding is that Music is still streamed, while it's the video content that is actually copied), sync up your iPod, work with any TV, surf the web, burn CD/DVD's, write your papers, etc, etc, etc.
If the AppleTV had DVR functionality, and I had an HDTV, then it might be worth it.
