From my readings, I don't really know if you should call it Apple TV. It is pretty much a small 160GB HD computer, that sounds like it runs exactly like a windows media center, but in Apple form.
Apple TV is able to connect to network devices like a wireless network or directly to another computer. When connected to a wireless network or a computer that is connected to the internets you are able to purchase and download movies, tv shows, podcast and what have you from the iTunes store (except for iTunes U, which most of the people I know, probably don't use.)
You cannot actually connect to other internet media services like Amazon or Rhapsody (Music), Jaman and HungryFlix (Movie Rentals), Shoutcast and Last.fm (Internet Radio, so probably not Pandora either as of this article), Picasa (Photos for slide shows and stuff), or Hulu, Joost, CBS, CNN, and TV.com (other video services). If you like audio books, then you also cannot download purchases from audible.com. No with all that said, it also does not have a TV tuner in it, so you cannot record directly to it like a DVR. It also has a USB port, but that is reserved for service use only, like say you download the update to a jump drive, because you don't actually have the Apple TV connected to the internet.
You are able to get onto YouTube though, which is probably more then enough for most people, but not anybody that is looking for a cable/satelite replacement (like me!) It seems like it works really nice, if you wanting it to work exactly the way Apple makes it work, but there are a few modifications that you can possibly do to it, but will most likely void the warranty or be cancelled out when an update comes out from Apple.
From what I can tell, it is better to just save up a little more money and purchase the Mac Mini. It is an actual computer that is pretty much the same size as the Apple TV, and then you can download a HTPC (Home Theater PC) application for the Mac Mini. You will then have all the features of the Apple TV albeit it little more difficult to figure out, but you will also be able to get to regular sites, even to watch TV shows, like Hulu and you can even get on Netflix and check out your instant queue then.
So I much rather go with the Mac Mini, or wait and see where this Google TV might be headed, and choose that intead.