I just don't understand with the huge success of iPhone and iPod touch why don't they model Apple TV around it
Apple TV:
1. add a modem to use like a phone, fax machine, or an answering machine
2. add support for a usb printer so that the fax software can print to it
2. add voip so that you can call anyone on the internet
3. add webcam support so that you can do video conferencing with voip.
4. add file server support
5. add app development support like iphone and ipod touch
6. add game development support like iphone and ipod touch
7. add game console with joysticks and motion sensor sticks like they have for wii and ps3.
8. add server app support so that developers can develop web servers, game servers, app servers on it (it would be cool to run a game server on it and have all my friends using iphone or ipod touch play mmorpg on it together.

9. and on and on...
With iTune app store you can buy all the games online or even rent them. No need for DVD games or blue-ray games.