I'm definitely hoping Apple aren't going for an integrated TV, or that it is at least a part of a lineup with a set-top box as well, as I still see more potential in a box.
Personally I'm hoping Apple will beef up their standalone Apple TV offering, as with WiFi and Bluetooth, a better ARM processor and a full blown iOS running on it it could easily be made into a full-featured media centre that can also handle games. Even better if they could start pushing "Apple TV Aware" apps that can function as controllers for the TV version of a game playing on the big screen; imagine running an Unreal 3 engine game on the Apple TV (with iPad 4 specs it should easily handle 1080p) with no need to worry about battery life, while your iPhone or iPad runs a version of the same game that automatically switches its display to function as a controller.
With iCloud syncing it would be easy to then just pick up the game and continue on the go, and switch back to the big screen when you're back home. They could even make things friendly to multiple players by serving up temporary copies of a game so your friends can join in without buying the full copy of the game unless they want to keep playing themselves; it would just lock out the full game unless you pay for it, with an option to uninstall if you're done.
Hardware wise the only things Apple would need to do is make sure the Bluetooth is good enough to handle multiple inputs without latency, and put in some extra storage so you don't need a computer backing the whole thing. They could even leave "true" controllers to the third party manufacturers though hopefully with some API support to make it easier on developers to detect what a player is using.
It's the kind of thing that could easily allow for casual gaming on an Apple TV similar to the Wii. Should be plenty powerful for that style of gaming which I think would be nice and popular thanks to the existing app eco-system; if made nice and easy for developers it would be easy for people to enjoy all their favourite mobile games but with a bigger screen. The iPad 4 isn't exactly a slouch anyway, and an Apple TV could actually afford to offer even more power since it has no battery life concerns.
So yeah; I'd love to see the Apple TV with a media centre, and "pro" or gaming version, one for playback only, and one able to support games and other, more complex, apps. If they are going for an integrated unit (not so sure about that personally) then the lower-spec media centre could just be rolled into that with the standalone unit for gaming.
Also components do not need to match the dimensions of the TV considering they are sitting in a cabinet that contains the A/V receiver. My Apple TV box does not need to match the thinness of my TV.
That's not necessarily true; what if they wanted to integrate a Facetime camera into the Apple TV? If they do go for the gaming/apps route then a Facetime camera could be useful for games that want to take advantage of a camera.
I do agree on a lot of your other points, I personally doubt a thin unit as well, though the possibility of something that can easily fit in the empty space most TV's have underneath, where their stand is, or the possibility of mounting it on top could lend some credence to the possibility. But I only see that happening if Apple wants a camera on it, which I only see if they start supporting apps, so while an APPle TV is something I absolutely want to see, a lot of what this article suggests is dependent on that, as a bigger internal drive would be a bonus for app-use, but not much use for modern streaming.
That said, loads of people still don't have broadband that's all that fast, or reliable. For example, my cable broadband is sold as 20Mbps, but I can actually only achieve that speed for about 20 minutes after which I'm reduced to 5Mbps for five hours to the tune of fair-use; this is a huge problem for streaming movies as few programs offer speed limits which means that while I might initially buffer very quickly I may not download fast enough to keep playing without interruption. So my personal preference is to download in advance, but this isn't possible with just an Apple TV; I have to do it on my computer and stream to the TV, which isn't really ideal. Being able to do it from the Apple TV only would be much better.
