picture this: streaming.
as for local storage, I would bet on a new timecapsule that provides caching of media from a streaming cloud service and/or syncing of locally created media (it's simply mirroring your mac's music and video folders... think about it, you could use the basic time capsule backup files as your service.).
Call me crazy, but apple allowing a non-apple built capability (NAS or a USB connected external drive) seems silly for a HW company.
I'd love an option for some kind of Apple-branded NAS solution, but I'm assuming USB so that it can be as simple as possible. USB means the dumbest guy can buy a USB drive, plug it into one jack and he's in business with fast local storage.
NAS comes with the challenge of wired vs. not wired, router connection, etc- great for those that can grasp it, not so good for "grandma".
Maybe we'll get both?
I've long desired for Apple to finally deliver a central server solution (beyond Time Capsule) for sharing an iTunes library, iPhoto library, etc with all the computers in a household. Maybe that will be a "one more thing", which would be a big "wow" for those that get why it would be desirable.
If this even rolls out an iTunes cloud service, it might roll out your own mini cloud (central server) too. But that might be a cloud of smoke vs. the other kind. I think bandwidth issues make uploading our own content to some server farm, then downloading it back to our iTV on the fly fail to make a lot of sense, except for those with sufficiently fast internet. It makes more sense to me to still house our local content locally, and somehow make that available to our home devices, with an option to upload stuff if desired (too), so that we can seek it out of the cloud when we are on the road.
Apple's crack at a Drobo or Unraid would be very interesting, with many applications beyond just a feeder for iTV. I'd certainly be interested, but I would have expected some rumors of such a thing to have been flowing this close to the event if it was coming.