There's a nice article in The Guardian today about the pros and cons of Apple launching an actual TV set (as opposed to the black box).
http://www.guardian.co.uk/technology/blog/2011/sep/05/apple-television
Pretty good read. I agree with the topic on upgradeability and Moore's Law, and this is pretty much the reason I wouldn't want an Apple branded TV, unless it was just a dummy display.
No way in hell will I swap out a 50" TV every couple of years like I do with my Macs and iOS devices. Talk about inconvenience. The truth is I'd love to own an Apple branded TV, but not if the computer part of it is integrated in a way that is not user-upgradeable.
So I think that idea of a "CableCard" that is talked about in the article is a great idea, and if Apple went this route, I'm sure their vertical integration way of thinking would make their TV stand out with better functionality and overall better reliability. If Apple could find a way to allow users an extremely simple "plug and play" internal upgrade to the TV set, that would be great (I'm thinking something as easy as installing RAM on an iMac).
Since the TV would house all connections, ports, wireless cards, and the display itself inside the set (industry wide standards that should remain for many many years), Apple could design an Apple TV card that could be much smaller than an iPhone or an iPod Touch, if you consider it wouldn't include a display or any of the standard technologies mentioned just earlier (while removing all unncessary hardware, such as FaceTime cameras, built-in speakers, antennas, microphones, gyroscope, accelerometer, mute switch, volume controls, you get the idea...). This could plug directly into the Apple branded TV and would feature the latest Apple chip and GPU to run the newest iOS software.
As for storage, Apple could include and market sizes in 16GB, 32GB, 64GB, etc. on the Apple TV cards, with subsequent generations being named Apple TV 3, Apple TV 4, etc., just like the iPad and iPhone product lines. The variable storage sizes would allow consumers to be ready for an Apple TV App store, which I can see opening up another huge new market for Apple if done correctly.
I didn't wanted to wait.