Already over 10 pages, so my comment probably won't be read by too many, and I don't even know where to start, but I'm a happy owner of Apple products (including Apple TV 2/3's) and XBox 360's, so I wanted to chime in.
I'm definitely happy to hear about Smart Glass, but it's obviously a response to AirPlay. Since I'm not the CEO of Apple, I really don't care if they blatantly copy Apple's ideas, in fact I welcome encourage all companies to blatantly copy (and hopefully improve on) great ideas by other companies.
As for me, I have a central computer running Windows 7 with Windows Media Center, connected to an HDHomeRun Prime CableCard tuner. It works great at recording all my shows from my Comcast subscription. And I've got a few XBox 360's around the house which can serve as Windows Media Center Extenders and play live TV, set new recordings, etc. Those work great, too.
I was able to score a couple of XBox 360's late last year after Black Friday (or whatever it's called) for about $150 each, with Kinect, too. The Slim is a lot quieter than the previous model, and a little smaller, but it's still *HUGE* and *LOUD* in comparison to the ATV2/3. and I don't think that the underlying graphics power is any more powerful. And if you're not buying it on some special sale, it's also more expensive than the ATV2/3.
The funny thing is that the best feature, for me, with the XBox 360 is how it works as a Media Center Extender, yet this is the feature that MS seems to want to deprecate. The latest features (Netflix, Comcast, Amazon Prime) all run under the native XBox 360 interface (not under the Media Center UI) and require the added-cost Live Gold membership.
I think it should be interesting to see what Apple announces this year. AirPlay already does everything Smart Glass offers, from what I can see, and Smart Glass is a future release. I'm sure that Apple, with their billions in the bank, hasn't been sitting still, so I suspect we'll see some new exciting features added to the Apple TV this year. Maybe it will be a full-blown SDK for developers to offer 3rd party apps, maybe a game controller and a focus on gaming, maybe NFL Sunday Ticket, maybe better iTunes TV rental offerings/pricing, maybe even a true DVR competitor (possibly related to a new AirPort Extreme box and HDHomeRun Prime compatibility). But I don't think it will be nothing.
If nothing else, even if they have been resting on their laurels (which I don't think they have been), if they do nothing this year and MS makes a comeback, Apple has so much money, and such a big lead, that this would serve as a 'kick-in-the-butt' and will end up resulting in some real improvements next year.
At this point, if I'm investing stock (and I *am*, a little) Apple is the company I'm investing in, not MS.