I certainly use my Apple TV set top box for its many apps and services such as Netflix, and Reflections which mirrors my iOS pictures and video on TV while playing my favourite tunes on my iPhone iPod player. Hulu has been recently added as well.
Tim Bajarin @bajarin president of Creative Strategies, seems to disagree and feels that a physical Apple TV is not in the cards. He notes that Apple recently released Amazon's instant video streaming app for the iPad which will compete directly with Apple's own iTunes store, but could move over to Apple TV much the same as Hulu has. He believes with these new announcements, that Apple is showing its hand and will instead, improve the external Apple TV box and work in areas that it excels in - software, content and human interfaces. Better yet if a new and improved Apple TV can interface with other TV's, then it can avoid future hardware TV obsolescence. Content is king and so why not continue to specialize there, rather than with TV hardware which churns every few years?
I hope he's wrong. I want to be the one of the first physical Apple TV's owners amongst my friends - including my kids and their friends!