Am I the only one wondering why they would continue development on the AppleTV box if an Apple-branded TV set is (supposedly) just around the corner? Seems to me that this rumor makes the TV rumor a little less likely.
if Apple were to release an iTV it would obviously run the same OS as the

TV. It makes sense to continue beefing up the OS in preparation. Especially if Apple wants to make an app store for the iTV. Now there are millions of

TV's all over the world that will give a greater incentive to devs. Can you imagine if apple said "Ok devs, start making some apps for this $1,500-$2,000 tv that I'm gonna be releasing in a few months. I have no idea how successful it'll be, but give it a shot!"
People go where the apps are, apps are built where the people are. If you start out at zero it's kinda tough to get either one.
Hulu Plus is a good example. I would rather have the app running on the Apple TV instead of tying up my iPad streaming the content.
Sure, 8GB is small by today's standards but there are plenty of usable iPhones out there with 8GB so it isn't unreasonable.
Smartglass? You mean like AirPlay from an iPad?
No I don't mean like airplay, at least not how it's currently being used. Airplay mirrors your screen or pushing video content. Yes it has the right basic idea, but it can be majorly improved upon even if it's just a matter of Apple creating better developer tools.
And it wouldn't occupy your iPad. If you've used Airplay you know that you can start a video and then leave the app or even sleep the device. The iPad/iPhone would simply be used as a remote to boot up the content, then do whatever you want. Have you used netflix on your

tv? Now have you used netflix on your iPad? HUGE difference in usability.
So I have to buy an iPhone/iPad/Mac to get the CTV app so I can watch the Daily Show?
Or just download the exact same app onto the iTV?
I choose option 2.
Do you not own an iPhone, iPad, iPod touch or Mac? If not, I'm not really sure what you are doing here. In fact I would venture a guess that less than 1% of all people who have bought the Apple TV don't own any of the above devices. I mean what is the purpose of it then?
What is the one thing I ALWAYS have on me at all times. my iPhone. What is the one thing I can never find. The TV remote. Now I will always know where my remote is, and if I can't find it I'll use the alert feature of "find my iPhone".