You mention this, but I've been wondering about AppleTV vrs Mac mini. For $300 more you can plug a full blown computer into your HDTV. Why stream when you can have right there on the HD?
I was thinking just last week that a full screen cover flow would nice, especially with my mini hooked up to my HDTV. I've also been thinking we are probably going to see more full screen interfaces to various applications. Now, add that concept to marrying a mini to a HDTV and there is a compelling product. Better than AppleTV because it can do full 1080p, you can add movie recording devices like Elgato, and add hard drives too.
The problem with the mini now is no HDMI connector and no HD-DVD / Blu-Ray option. I think the clincher will be if Apple adds an HDMI connector to the next mini revision. And if current rumors about new dispays are correct then this is a given. If they do, I expect a lot of people will opt for a miniTV solution over the AppleTV device. For a few hundred more, you can get much more.
So, I don't think we've seen the end of the AppleTV strategy. I still think a meda mini is a very real possibility. Intel's next integrated graphics chips are going to have dramatically improved graphics support. And add to that beautiful full screen interfaces to some applicaitons like iTunes, iPhoto, and others (Safari?) that would enhance using a computer in your living room.