There are tons of free wifi connections where i live. Be it free providers or people with unsecured networks. Plus there is a paid WiFi service in the downtown core.
This is exactly where I believe Apple is aiming. AppleTV is one part of this strategy. With a control unit in place to communicate with the network and provide database access and menuing from a dedicated processor, AppleTV bridges the gap between the LAN and your home entertainment.
There are patent filings that indicate that Apple is serious about adding the ability for two way communication between input and output devices via AppleTV. For example, using iPhone to surf the network's media library remotely, and then play it back through a third device.
Soon we will see that on board storage will be even less relevant for the same reason that the ubiquity of email rendered the microfloppy superfluous. Content access from the net to your LAN over wifi, wimax/4g etc. will become commonplace.
This is also why iPod touch and iphone are emerging. Apple is betting rightly on the huge increase in mobile access to the internet with devices that increase the convenience of mobile Internet access... But giving it VALUE by focusing this usage as a conduit for media content. I can't begin to tell you how quickly I have multiplied my mobile Internet usage because of iPhone.
The user interface is a huge key to this as well. It is not only intuitive but just plain cool and that makes it very addictive to want to use multitouch. In fact I frequently use it on my wireless LAN at home as I can lay back comfortably on the couch and surf. I'm on iPhone right now.