The Apple TV 2.2 focuses almost entirely on playback and purchase of movies and music.
It's a typically Apple approach: remove the silver and white unit from the box (while appreciating the lack of an external mains power brick), and all that remains within is a power cable and Apple Remote.
Apple TV integrates tightly with iTunes; in practice it's a little like a mixture of using the iTunes store on a Mac or PC, and using Apple's Front Row application, moved to a TV.
Apple TV isn't physically expandable at all, and can be used only with HD TVs - irritatingly, a HDMI cable isn't included; which is maybe a little too minimal. The only other connections are an ethernet port for those not using wireless networks, a USB port (for maintenance), and an optical audio output.
The Apple TV appears as a device in iTunes, and content can be streamed from the computer, or synced across for full-time storage on the Apple TV's hard drive (the first sync can take a while).
Whichever method you choose, content is displayed in the Apple TV menus alongside the online material. iPhoto albums and MobileMe content are also syncable for Mac users. It's possible to browse YouTube movies, too - although there is an irony in watching grungy videos on HDTV.
Movie rentals and purchases are temptingly simple, and playback can be started before download finishes, which is useful when downloading a large HD format movie. Speaking of which, HD image quality is great, and you come to appreciate why Apple forced the issue. We also had a blast controlling the Apple TV with Apple's free Remote application for the iPhone and iPod touch.
The one down side is the price. The US had a big price drop last year, but the Apple TV in the UK is still an expensive beast. If it was half the price, we'd consider it.