Remember, when you consider the price of this $299 hardware you have to include the $99 purchase of OS X, if you want to do it the legal way. The Mini comes with it preinstalled, so you have to compare the iTV at $398 vs. the Mini at $599. Then if you want to add 512 MB of RAM that's another $100 - and the Combo Drive alone is worth the remaining $101 difference.
But if you have an iTV anyway and a copy of OS X lying around it could be a fun enough thing to tinker with. I'm just saying it doesn't really increase the iTV's appeal for most people.
What I'm wondering is if it works the other way. It would be cool to take an old Mini and install the

TV's operating system on that to run as a media center.