What will blow your mind is when I tell you that I streamed this 720p trailer from a 933MHz G4 Quicksilver (Apple's minimum recommendation is a 1GHz G4, as per the

TV manual), over an 802.11g network in an apartment building with steel framing and 10 nearby wireless base stations interfering with the signal and aside from one initial buffering delay it played through without a single skip or jitter.
I have a Sony WEGA XBR HDTV (34" CRT) and I have to say, I'm more than impressed with the 720p playback. I had some initial concerns about proper representation of the HD color gamut, but the Spidey trailer looks identical to every other instance of it... broadcast, HD, I'll even say pretty close in perceptible clarity to theatrical projection (taking into account the difference in display size). The color, clarity and contrast are stellar.
What disappoints me is that at the Apple Stores, their demo units are loaded with low resolution files worse than the 640x480 ones. Add to that the entry-level Bravia LCD TV's they're using in which even the menus look considerably worse than on my XBR (LCD's are considerably inferior to CRT's yet)... and you have a recipe for marketing disaster. If they do not fix this problem soon, they're not going to attract nearly the numbers of users they could if they had one floor demo unit with a kickass display and 720p demo content.
As it stands, I could sell more AppleTV's from my living room than they'll sell in all 4-5 stores in the Minneapolis area. But I guess that's not surprising with regard to retail. If you walk into most retail stores carrying HDTV's, the picture on the floor units is never calibrated and the source is almost never an actual HDTV feed (usually just SD cable in stretch mode).
But I do expect more from Apple Store retail... they've done every product launch pretty well thus far. They're risking blowing it on the most significant product to be released by Apple since the iPod.