So the difference between a portable device that's meant to be carried with you all the time and one connected to your big screen TV is insignificant? Amazing.
User can continue to use their existing content - on the DVD player that they already have connected to their TV. There's little (or no) benefit to ripping the videos to the Apple TV - unless you're just too lazy to get off the couch to change a disk.
I stand by my belief that its a minor difference. From a users perspective the ablity to utilize one's existing content trumps the neat interface and other features of the ATV. Do you think the iPod would be as successful today as it is if iTunes didn't allow you to rip cds so easily? I can't find the link but I remember seeing an article at ars where 70% of the content on iPods was ripped from existing cds.
What's the must have feature to get people to buy an ATV? Most people don't have much content they want or need to get from their Mac to their HDTV. Lackluster sales of the ATV support this belief. Increasing the storage on the ATV isn't going to change things much either.