... all the old SD TVs will be obsolete in a year, and I think ATV will do well.
SDTV will not be going away. It is only
analog broadcasts that are going away. Anybody getting service from cable, satellite or fiber is unaffected by the 2/09 shutdown. And there are SDTV sets with digital tuners (I have one). They downsample the ED/HD programming to SD resolutions and display that. The result looks surprisingly good (at least on my SDTV's 15" screen.)
Do you think Apple will have any effect on the physical media war?
I doubt it. A lot of people (myself, included) like buying DVDs, and will start buying HD discs, once the format war is settled.
I don't like the idea of purchased movie downloads in general. Even if the image quality matches what you get on a purchased disc, and even if the full set of bonus materials are included (which is not the case, so far), I don't like the idea of needing to buy large quantities of hard drives to keep all my purchases. I don't like the idea of storage media that will break if dropped on the floor. I don't like having to bring a hard drive (or computer, or set-top box) to other people's homes in order to show a movie over there.
I actually have less of a problem with rentals. Since those will be seen once, and then be deleted, none of the above problems are a real concern.
I was going to say that I have Component In's on my tube TV so it'll work for sure. AppleTV has no clue what's hooked up to that because there's no digital signal telling it what the TV aspect ratio is.
Not all component video inputs are HD-capable. If yours are not, the Apple TV may not work with your set.
If the inputs are HD capable, the TV will be able to recognize a 720p or 1080i signal. Since those signals are only specified for widescreen, a good TV should automatically letterbox any image using an HD signal.
Once this is complete, we just need the major music labels to give us our DRM free music at a good bit rate. I am ready to give them more of my money to upgrade my current library to iTunes+, but they don't want to take it.
This is just a matter of time. The labels will come around eventually, especially when they see that the Amazon deal isn't affecting piracy or CD sales in any significant way.
For now, I still get most of my music on CD. Thanks to discount stores, clearinghouses and used-music stores, I don't pay much more than the download price (assuming I like most of what's on the CD).
For those bands where the CDs don't have many good tracks, I'll stick with the iTunes DRM. They play fine on my iPod and I can still burn CDs if I really want to.