I think we'll see an Apple TV update once they find some hardware that can decode 1080p while not melting the existing case.
Been out for awhile and it's being used in the WDTV....it's the Sigma chip.
Back to OP, do you think Apple is waiting for the following?
- Snow Leopard so they can put out a new OS (current ATV OS is based off of Tiger) to do more stuff (i.e. cool apps controlled by the iPhone & keyboard)
- which then allows a cheap CPU with a good GPU (kinda like what they have now but even better) to run faster and better eye candy
- which may allow them to even run 1080p (I've read the current GPU can even do 1080p, it's just not turned on)
- w/smaller more cooler components (think green)
- and they're waiting for network bandwidth to get faster to stream 1080 stuff?
I don't see them really expanding their hard drive too much more or letting you add an external. Why? Because 1) they want you to rent from iTunes and 2) the MPAA doesn't want you loading up your ATV with your own content or pirated stuff.