If I was running this show at Apple, I'd launch this thing ASAP. With the few issues/shortcomings fixed in a "third time is the charm" update, I suspect it would be a massively hot seller for the holiday season. I'd buy a bunch of them as gifts for friends (and finally update my own too).
I think this "hobby" could be huge for Apple if they would just get on with finishing the evolution so that it fully competes with the max video & audio playback specs of BD and incorporates a few of the bigger wishes that remain unfulfilled in the current version.
I think that's the issue. I'm sure the TV industry knows that if something like AppleTV ended up everywhere, there's a huge chance that Apple will start flexing for a la carte programming, and then the major cable operators would be in serious trouble. They probably have a set of deals in place just to prevent this, and Apple will swoop down when the contracts start to break, which would be a great use of that huge horde of money they have but aren't spending.