There always seems to be another Apple TV patent popping up (I find this one
very interesting as well) to the point where I wouldn't be surprised if Steve already knows exactly how he wants Apple TV to work - he probably even has a prototype.
However whenever I read about this it always seems to come back to the content providers. Creating a "magical" device is only half the solution - the rest is finding a way to get the content owners/providers on side.
Apple have already kind of fought this battle before with the music industry so they at least come from a position of experience.
Microsoft seem to be making ground as well (limited cable over IP is already available on Xbox in Australia). I'm not sure what their secret is. Maybe they are just throwing money around.
Looking at the number of sites that are blocking Google TV it seems they may have forgotten entirely about the content owners/providers and just built the device! No doubt they are working on expanding GTV though.
The market is certainly there for someone willing to make a bold move though (assuming it's allowed to go through) like an Apple buy out of Sony, Time Warner or even Walt Disney or Comcast/NBC.