I agree. The Apple TV doesn't make much sense in conjunction with Cable/Satellite/Tivo, but I do think it starts making a lot more sense if you consider it as a replacement for those components instead of as a companion to them.
I think the same, and I am hoping this will turn out to be the case. Although even though I am waiting for the content to get to that level so I *can* do that, I live in Canada so it might be a long wait.
In our area, like many, a single cable company has had a monopoly on all cable for twenty years or more. Because of that, the prices are outrageous, the content crap, and the "choice" non-existent (F*ck Shaw cable

). We subsist therefore on free broadcast TV and buying huge amounts of DVD's for our entertainment and refuse to knuckle under to the cable company.
Interestingly, Shaw cable actually *targets* households like us and compared to our neighbors, we get a veritable avalanche of advertising pamphlets, promotions, phone-calls etc. desperately trying to entice us into the Shaw cable "family." When someone in the neghborhood gets a call from Shaw, they come over and knock on our door to ask us one more time if we might like to join.
It's humorous, but really quite creepy, like some kind of futuristic TV cult.
In any case, like Steve J. suggests, there is nothing we would like better than to leapfrog over cable/satellite TV and go straight to broadband delivery through Apple TV. The problem is the content isn't there yet, and the content suppliers are all fractured.
As much as I don't believe in monopolies, what internet based media really needs right now is one single place (iTunes) that is world-wide and includes all or almost all of the mainstream media. If this is what Apple TV is aiming at (and it seems likely that it is), then it's *precisely* what a great deal of people want and could easily make your local cable company obsolete.
At the very least it might encourage them to offer reasonable pricing and something called "choice" to their subscribers.
