Don't forget that DVDs are 480i anamorphic, where as Apple's HD will be 720p square pixels.
Even with the bit rate being lower than DVD, it will still contain many more pixels and will appear much crisper on your HDTV. DVDs will always look slightly blurry due to the fact that the image is stretched horizontally to make it widescreen.
Not all DVDs are anamorphic, and the aspect ratio varies from movie to movie (1.85 to 2.35 is the common range).
As far as pixels and crispness, a high quality upscaled crisp DVD image can preserve much of the crispness - since the signal processing logic in the upscaling circuitry can do edge detection and "invent" a straight line in the upscaled image. These upscalers aren't like QUicktime player, where you press Ctrl-2 and every pixel becomes four - they are high performance image processing engines with a lot of intelligence.
Starting with a fuzzy over-compressed (but larger) image like Apple TV, it's hard to create upscaled straight lines that are missing from the original.
"So the *only* way to get a 1080p picture on a 1080p set is to buy a high-def DVD player (Blu-ray or HD DVD)."
And I did buy a Blu-ray player. Three, in fact, if you count the Blu-rays in the computers. And I rent or buy Blu-ray movies and documentaries (some amazing BBC and National Geographic stuff is out there). And I watched the demos at Macworld Expo - and they looked worse than upscaled DVDs.
Anyway, enough for now - enjoy your Apple TVs.