So far I must stay that the AppleTV has met my expectations. I feel that it does what it advertises and does it well. I've already converted several of my favorite DVDs to MP4 and play them through the AppleTV on a regular basis. On a 50" Panasonic I could not detect any degradation that made the movies unwatchable. They're certainly not HD quality but then again neither are the DVDs. Overall I'm very pleased with my purchase. Although I did educate myself and make sure I knew exactly what I was getting...and it met my needs.
I know so people don't want to be tied to iTunes. Personally I don't mind. Apple has gone further than the other options in allowing cross-platform usability. I haven't seen the xbox360 in action but I would venture a guess that you can't use if all you have are Macs. Someone correct me if I'm wrong.
I am also surprised to hear about the lack luster demo. Wonder if it has more to do with the personnel running the store. Steve seems to be all about selling the strong points and it doesn't sound like your demo was selling the positives of the device.
I look at the AppleTV similar to how the iPod first emerged. We all heard from the naysayers about how it was too restrictive (some say it still is but Steve is working on offering the non-DRM files soon), too small, short on features. But look at how far they have come and how many people have adopted the iPod as their music player when other products are available with bigger feature sets and lower prices. Give the AppleTV time and I'm sure we'll see it grow into much more than it started as.
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