I _think_ that a lot of non-technical people (even Apple fans) will have a hard time buying accessories for their shiny new "Full HD" flatscreen TV, and then buying an Apple TV that doesn't support it. Unless they reduce the price to the point where it's a no-brainer.
Fortunately, I'm still able to buy an Apple TV that supports 1080p without problems, called a Mac Mini :)
Take a look at their "High Res" movies
http://thepiratebay.org/top/207
First the majority are in 720. The ones that are in 1080 tend to be 10GB to 50GB in size and downloading them can take days (I've tried - on a decent cable modem connection). Then you need to store these beasts which means some sort of multi-terabyte storage server - or burning them to Blu-Ray or HD-DVD disk. A perfectly acceptable alternative but then you're not usually using an Apple "iTV" as your playback device.
So so far this is so far out as an edge case that Apple's choice still makes sense.
Mandatory 15min previews of new Pixar movies before you can watch your download? No roblem.
How long has it been since you had a complete physical checkup?
On balance I find tapes easier to use and less frustrating.
I am not prevented from skipping the FBI warnings, studio logos, legal disclaimers, previews, and other nonsense.
VHS tapes are much more robust. I've never had to clean one, or have it not work. DVDs have conniption fits over a few fingerprints, and if they get scratched, forget about it.
And if you do have to remove and clean a DVD to resolve a freeze-up, you then have to navigate through menus to get back to where you left off. With VHS, you can stop the tape, remove it, turn the player off, and come back later and pick up exactly where you left off.
Yeah the VHS picture is not as good as a DVD, no argument there. But for a typical Hollywood movie on a TV at home, it's good enough. Certainly no worse than the haphazard stutters, pixelization, and freezes one experiences in a typical DVD viewing.
Now, consider the iTV. Fingerprints and scratched media, not going to be a problem. Picture quality, at 720p, good enough for the masses, especially for a $99 device. If they can bypass the studio-imposed inconveniences and make using it a frustration-free experience, they will sell plenty of them.
I despise the FBI warnings; I'm from Canada, try and catch me! We're apparently the kingdom of video pirates as is, obviously the FBI warnings aren't doing shit here as is so why do I have to sit through them, plus a bunch of other anti-piracy warnings, sometimes in like 5 different languages.
I haven't switched over to bluray yet. Too expensive and the extra image (1080 vs 420) isn't worth it for 90% of movies and TV shows for me and those that are I can stream 1080p through my xbox.
Our government prevents outside companies from entering the markets and make it damn-near impossible for internal companies from entering the market too to ensure Bell, Rogers and Telus keep their monopolies. Telus barely has a TV service. Rogers has cable, but are locked out of many areas, thankfully my area I get Cogeco which provide relatively cheap, very good quality internet.
I don't watch live-TV for shows I need in 1080p anyway, so I deal anyway. I don't exactly want adverts when watching a SG:U in 1080p; kills the experience.