I am guessing we 1st gen ATV owners will now be 1st gen iPhone'd out of the market. Forced obsolesce , Don't you love it.
Im not buying the new one, and now im unlikely to spend anymore money on iTunes on movie or TV purchases, if i cant buy the Shows direct on my ATV unit, im not going to buy them in iTunes , wait for the download to complete, and go through the hassle of syncing them, to then watch them on the TV, when i used to click purchase on screen, and watch in seconds.
Back to buying DvDs for me, I Occasionally used to rent a Film, but i have purchased over 2TB of TV shows, and quite frankly, i don't care how cheap a TV rental is, im not going to rent something i get for free over the air, there is no market in TV show rentals, either you need a subscription model and compete with Sat or Cable, or you sell programs , even at 99c a rental, im not spending $20+ a season for all the shows i watch EVERY YEAR, to only be able to watch the show ONCE.
Also i liked my 1st Gens ATVs internal HDD, i could load it up with movies and TV shows and take it away on holiday, or to friends houses for beer and bad movie nights.
Typical apple though, 50% of a brilliant idea Improved by adding nothing, and removing functionality people use.