The real value in the Apple TV is the ability to stream all your media thats in iTunes on your desktop or laptop to the Apple TV. The implication of that is whatever home movies, ripped DVDs, podcasts, etc (in addition to content purchased on the iTMS) that you have are watchable from the comfort of your couch.
This requires some tooling up (ripping software, handbrake) but once you have the tools you can basically rip your entire DVD collection to MP4 and have it on demand with no discernible loss in video quality. If thats interesting to you (and you don't have the big budget for a kalaeidscape system) then Apple TV is for you.
