I have been a (relatively) satisfied ATV1 user for about 2 years, and I must admit I was hesitant to make the switch to the new ATV2. I didn't care about lack of onboard storage (syncing content sucks), but I was afraid I would miss some of the other functionality removed in the ATV2 (specifically the separate menu for my movies/music and the lack of ability to buy music from my couch, which was awesome). I received my 3 ATV2s yesterday (sold my ATV1 on eBay) and got one of them set up immediately. After 24 hours, I'm surprised to say I'm loving the new ATV2. Pros: *AirPlay: Cool, very cool, even if I haven't found a practical use for it yet! *Reliable access to my content: There's a good reason Apple dropped the syncing model of the ATV1 - it was complicated and unreliable. A dirty little secret about the ATV1 was that even if you 'streamed' all your content, it still had to sync your metadata, which it often neglected to do, so new content on my Mac wouldn't always show up on my ATV1. No such problems with Home Sharing - all content and metadata is streamed on demand, so no syncing necessary. *Finally decent bitrate/FPS support for home movies! I record all my home movies in 1080i, 30fps. With the ATV1 I had to downscale them to 720p, 24fps, 6000kbps. The result was jerky, grainy video that looked like an early Charlie Chaplain film. I just resampled one of movies in 720p, 30fps, auto bitrate (it encoded at 17000kbps!). The resulting movie played beautifully on the ATV2, and the difference in quality is stunning. Now I just need to buy 2TB of storage so I can re-encode all my home movies *Snappy/stable: My ATV1 would often lag/stutter, but the ATV2 is fast and responsive. Not surprising considering the switch to much newer hardware and a modern code base. *Cheap = an Apple TV for every TV in the house. I couldn't justify $250*3 = $750 with the ATV1 on 3 TVs, but $300 is a much easier sell. *Small yet solid. I love the footprint of this new device. Apple is almost showing off how much they can fit into such a small package. My cable TV box (which also just streams video) is about 20x bigger and just looks ridiculous next to it. CONS: *No ability to purchase music from the ATV2. I know Apple wants to move to a rental model for movies/TV, but I still think users want to be able to buy music from their couch (and Apple should want this iTunes revenue). I think this is a technical limitation (Home Sharing is kind of a one way street) but perhaps they'll figure something out. *No 'On The Go' playlist. This sounds small, but it's sorely missed. On the ATV1 you can build a playlist to listen to and even save it as a new playlist. Now when you listen to music you have two choices - play an existing playlist, or play an entire album/artist. That's lame. *Separate 'Computers' menu for my content. This has been discussed all over the place, no need to repeat. Definitely a step back. *No App Store? More importantly, no Pandora. I'm sure the App Store will come, would have been nice to have something at launch though. So overall I'm more than happy with the ATV2 and I'm excited to see what Apple has in store w/ software updates. I miss some of the ATV1 functionality but it was a necessary move to rebuild on a more modern, simpler platform (both hardware and software). Now, time for the next software update!