While the Apple TV and Windows Media Center both bring content to your screen, they're each very different in the way they go about it.

Apple TV

The Apple TV is essentially a self-contained device, or "appliance" if you prefer. In the physical sense it's very basic. You don't have to install any software, worry about upgrading any hardware, etc. In fact, you can't. Think of it like an addition to your Blue-ray Player, DVD Player, VCR, etc. You have a Blue-ray player for your Blue-ray movies, DVD player for your DVD's, VCR for your tapes.... the Apple TV is essentially a player for your digital and internet content. The movies, music, tv shows etc that you've been watching on your computer.... the Apple TV brings them to your TV.

The other purpose for the Apple TV is to purchase tv shows and rent movies from iTunes, and display them on your TV (as well as your other Apple devices). This could be done on the computer through iTunes as well, but again the idea here is to bring it all to your TV.

The Apple TV connects to your computers and the internet through either a built-in wireless connection, or optionally a wired ethernet connection, but it does have to need to be able to access both the internet as well as another computer on the network (either Windows or Mac) running iTunes to be able to use it. So if you're planning on buying an Apple TV for someone who doesn't have a computer or the internet, well don't. You lose most of the functionality without it.

In short, what does the Apple TV do?

• Movies - watch your own (must be ripped), watch trailers over the net, or rent movies over the net through iTunes
• TV Shows - watch your own (must be ripped), or buy over the net through iTunes
• Music - listen to your iTunes library
• YouTube - browse YouTube and watch videos, just like on the computer. Very slick interface though
• Flickr - view Flickr photos
• Photos - view your own photo album

What doesn't the Apple TV do?

• Play DVD's - there's no DVD player built in
• Watch TV - no tv tuner card
• Record TV - no tv tuner card means this can't be used as a PVR
• Allow addons/plugins - there are ways to "hack" the Apple TV, but they're not terribly easy to do, and also void your warranty.