I must be really out of touch, this is the first I've heard of Apple TV. What makes it different from DirecTV Cinema, other than the purchase option, the rental prices are about the same.
If you use and like iTunes, but want that content on your Home Theater, then an AppleTV is the way to go.
AppleTV In essence, it's sort of a glorified iPod, but with networking capabilities. It connects into your TV & home theater to present music, movies, TV shows, local Photos, YouTube, Flickr photos, and Internet Radio on your HT system. It can also connect to the iTunes Store by itself, allowing you to browse and buy music or TV shows, or to buy/rent movies. There is no monthly fee. You pay for the unit itself and then are charged when you buy content.
The AppleTV itself is a 7"x7"x1" square that sits somewhere in your AV rack. WiFi, ethernet, HDMI, toslink, & RCA A/V. Video to your HDTV, sound to your AVR. Controlled by an included Apple IR remote, your own universal remote (I use a Harmony One), or via your home network from iTunes, an iPod Touch, or an iPhone (which is pretty cool).
You link the AppleTV to your iTunes account and an iTunes instance/library on a PC/Mac, (wireless or wired) and then you control what media content is copied from that PC/Mac. Just like an iPod, you can choose some or all of your content to be copied. Or the ATV can stream content directly from an iTunes library if your media library is too large and/or you have a dedicated media server. After you set it up, the ATV will automatically sync up (if needed) and maintain the sync with your media library whenever you run iTunes on your 'library' computer. So if you buy or rip new music on your iTunes library, it'll automatically sync over to the ATV. And vice-versa, music or movies purchased on the ATV sync over to your iTunes machine.
I choose to sync everything in my media library to my ATV, so all of my Music & photos are copied and available on the ATV even when my Macbook (where my media library resides) is off. Some people keep a dedicated server running, and the ATV can browse that content just as if it's stored locally.
As I mentioned, we really like ours. There are two main ways we use it.
Firstly, we really like listening to music with it, as it's wonderful to have my entire ~5,000 track library just a few clicks away. Everything is at least 256k AAC, and I have zero complaints about the quality of either purchased or self-ripped music. Sounds beautiful on my system. I also have ours set up to randomly cycle through my 10,000+ collection of family photos from the past 10 years as the music plays, and we've had the nicest times just kicking back with a glass of wine, listening to our favorite tunes, and chatting about the photos that saunter over our 61" HDTV screen. Good stuff. It's also fantastic for showing off vacation or event photos to friends and family. We also buy music directly on the ATV sometimes too. Apple has made browsing the iTunes store very easy and seamless, with music previews and a "you might like..." feature. Great to listen to the previews on the 'big' HT system. We've found several new artists just by surfing around the iTunes store and following its suggestions. Click, preview, like, click, download, done, listen, enjoy. All from the couch. All just charged to my iTunes account. It's the ultimate in couch-potato media consumerism.
Secondly, we rent movies from the iTunes store. Usually in HD but sometimes just in SD, as the PQ is good enough for many movies (ahem, chick-flicks). HD is $4-5 each, SD is $1-$3. Lots of fun to just browse around the store, looking at new releases, old releases, even just to watch trailers. With our 3MB DSL connection, HD movies take about an hour to buffer. SD ones are available to watch immediately. Movies are available to buy when the DVD's are released, and are usually available to rent about a month later. We have never been big into buying movies, so we just rent everything. Some TV shows are available immediately, like within 24 hours of airing on the network. Many prime-time, major-network shows are like this. But other shows are only available when the show's DVD is released. And some aren't available at all.
And you aren't limited to just the purchasable content on iTunes, either. Just as iTunes is perfectly happy with ripped MP3's, if you can import the movie/TV/media into iTunes, you can play it on an AppleTV. With some formats, you might need to re-encode with software (Handbrake is a popular one) to an ATV-friendly format, bitrate, or size, but you can watch just about anything on an ATV.
I hope this helps a little. Good luck!
