We got an Apple TV this week, and it's excellent, although I tripped over some serious network problems (more Mac problems than Apple TV problems, actually).
Compared to our TiVo (upstairs) or our Time Warner Scientific Atlanta HD DVR, the Apple TV is surpringly advanced. The SA box keeps losing signal (probably TWC's wiring at fault, but they keep not fixing it), and is much larger (and noisier) than the Apple TV; basically it's a piece of junk, but it's substantially cheaper than another TiVo. We'll probably get rid of this DVR and our downstairs cable connection in favor of the Apple TV very soon.
Comparing the Apple TV to the TiVo is more interesting, not least because people have been comparing the two companies for years, and keep demanding that Apple build a TiVo killer (both before and after the Apple TV release). Given how badly cable companies stink, it's hard to believe Apple should embroil themselves in this mess, but they seem to be doing okay with the iPhone, and phone companies aren't much better than cable companies. People also want Apple TVs to play DVDs, which is an obvious feature, but would be less profitable for Apple than iTunes Store rentals and purchases. But back to the comparisons.
The SA DVR has exactly one advantage over the TiVo (aside from price): its "Ouija board" -- when you need to "type" with a very limited keyboard, the TiVo makes it possible but not easy. The SA box improves the experience dimming (and skipping over) invalid letters (which would spell words that don't match the list of available shows). The Apple TV, interestingly, has an unimpressive on-screen keyboard and a very limited remote (it's the same one Macs ship with, meaning 6 buttons: 4 directions, play/pause, and menu/back). But it's easier to use, because the Apple TV doesn't lag behind user input as much (it doesn't have to match input against all possible titles, remember), and tactile response is very good; I only made one typo when entering usernames of several friends, and it was easy to correct, even though Delete is an onscreen selection (no Clear key, as on the TiVo remote).
This brings us to another interesting comparison: the SA box has Internet connectivity (I think it's channel 996 that shows the current IP), but doesn't use it for anything except the electronic program guide and purchasing pay-per-view (which we don't do). The TiVo adds TiVo-to-TiVo transfers of shows (we only have one, so haven't tried it), scheduling via http://www.tivo.com/tco/, an unsupported web server which allows downloading encrypted/watermarked television shows, and the ability to run applications from a server (either at home or across the Internet). Applications allow you to play music or slide shows from a Mac or Windows PC, or slide shows (from your Picasa or Yahoo Pictures account -- but not Flickr, even though Yahoo owns Flickr!). Unfortunately, you cannot combine these applications, so it's impossible to listen to music while watching a slide show on the TiVo. TiVo has apparently dropped support for third-party development.
The Apple TV, on the other hand, does this all much better. Out of the box, it comes with a set of high-quality flower photos, which run as a slide show when idle. Music can be a) played from the Apple TV's hard drive, b) streamed from iTunes on a Mac or PC (controlled from the Apple TV), or c) streamed from within iTunes in AirTunes+ mode -- iTunes sends audio and ID3-style metadata including cover art over the network to the Apple TV. In any of these modes, track information is displayed onscreen, and if the Apple TV is left idle, the it starts showing a slide show (ours is photos of Julia, of course); this doesn't interfere with music playback at all.
Compared to TiVo's lousy support for Yahoo Photos (!?!) and Picasa (they want you to create your own account and log into it before downloading any photos), the Apple TV supports Flickr and .Mac photos, as well as the owner's own via iTunes, of course. There is a clear hierarchy of user experience here: no support on SA/TWC; poor slide shows or mediocre media streaming on TiVo; high-quality music and photos on the Apple TV, pre-loaded with nice photos for a superior out-of-box experience.
One of the few things I regret about the Apple TV is that I bought it from Apple; I didn't get an educational or corporate discount, so I could have gotten it faster for $15 less from Amazon (via Prime), but when I tried to cancel the order at store.apple.com it had already gone through (less than 5 minutes after pressing Submit). This should be the worst problem I have with the new gadget!
Unfortunately, it wasn't. The Apple TV would not synchronize content from iTunes; I was able to play music through it (AirTunes), but it mostly refused to show up in iTunes' DEVICES list. I got a warning about port 3689 possibly being blocked by a firewall, which I initially ignored, knowing I had specifically allowed iTunes to connect through Leopard's "socket firewall".
pepper@prowler:~$ grep 3689 /etc/services
daap 3689/udp # Digital Audio Access Protocol
daap 3689/tcp # Digital Audio Access Protocol
The second time I got this message, with iTunes' Preferences claiming the Apple TV was synching even while it wasn't fully accessible, I did some searching, and found out that indeed several people needed to open up the socket firewall before Apple TV synching would work. I did this, and lo and behold, our Apple TV now has the proper 12gb of video, 51gb of audio, and 3gb of photos it should. It's bad that iTunes wasn't properly whitelisted in the firewall, but it's much worse that people need to turn off a security feature to make the Apple TV work. Fortunately, after I switched the firewall back to "Set access for specific services and applications" (where it should be), the Apple TV continued to appear and synch properly; bug filed with Apple.
That brings up another bug: we have a Gigabit Ethernet network (3.5 switches -- 8-port, a couple 5-port, and the 3-port built into our Time Capsule) and an 802.11n network, but unfortunately the wireless doesn't work right. At 5GHz, I keep losing my connection; at 2.4GHz it stays up everywhere except the guest room (which has no Ethernet), but speeds throughout the apartment are poor and connectivity is less reliable than our 802.11g Airport Extreme network. Since I haven't fixed this yet, I much prefer to do large transfers over the wired network.
The Apple TV connects to a running copy of iTunes to download content; in my case, most of the connections (once I got past the firewall issue) were to the AirPort IP address, which prevented them from making progress on the 65gb transfer. I had to disable AirPort to force the Apple TV over to the Ethernet connection, which was much faster; after it was done I re-enabled AirPort, but that's another bug (also reported, and yes, I do have System Preferences set to prefer Ethernet to AirPort).