I'm a Mac fan (I just upgraded to Leopard today. Isn't it nice to have a newer OS actually run a LOT faster than the previous one. Go try that with Vista !)
I don't like the AppleTV because it doesn't have a SCART connector. BIG mistake for the European market.
No I do not want to buy a LCD/Plasma thing. I don't like them. So I don't have the right connection that gives me the best picture on my CRT TV.
I'm a Mac fan, not a blind follower.
And indeed, you can hack it in minutes. It essentially is a very small mac. You can probably even run MAME on it now (not sure about that though

)
On the other side. I sometimes want to see a movie but don't want to go to the video rental place to get the DVD. I also always have the feeling I want to see that movie NOW. (Are you going to rent a DVD and then have it around for weeks and then watch it ?) Also RENTING a movie means you're returning it anyway. I usually only want to see a movie one time. The really special one's I buy.
So, the concept isn't all that stupid.