As an added note...
If the "8 lbs, 10-inch screen iPod"
joke refers to an "iPod stereo" that replaces your tape/CD player unit, can read/rip CDs (for people without computers or computers too old for iTunes), has an iPod dock and has iTunes + Wi-Fi for the iTMS...
There's not much more hardware needed to have a TV out to get Mail, Safari and iChat in the living room. That's where FrontRow and the remote fits into the picture! (with a bluetooth keyboard to use the other programs).
I'd also bet this unit will use a G4 to keep it low-cost. If it has an ATI GPU that can do real-time H.264 hardware decoding, the G4 could even be 1.25 or even 1GHz. I also remember a low-power, real-time H.264 decoder/
encoder chip in the news a few months ago. And remember that long-term Freescale contract?
Of course, it's gonna be a complete Mac, you'll be able to install software, play WoW on your TV and all, but Apple won't market it as a "Mac" (or perhaps they will... to re-enforce the Mac image/platform).
"Introducing... The EntertainMac"....
Ok, so I hope Apple's marketing department will have a better name for it.
Now, who can "photoshop" a nice mock-up of such a device? Remember, it has to have the look of an iPod/iMac, 10" touchscreen, CD/DVD player (slot-load,
of course), IR port... possibly with optional speakers. Just as the Mac mini was only supposed to replace your beige tower, so will this product only to replace your tape/CD player, your DVD player and your VHS recorder (with iTMS subscriptions to shows, a-la-carte).