Don't forget that along with being able to play many other file types vs.

TV out of the box... and not having to have a computer on when you are using it... and allowing you to add whatever size of local media storage that best fits your own needs, it also has 1080 HD hardware, so you can maximize the resolution of 1080HDTVs.

TV is limited to a weak incarnation of 720p- not even 720p/60fps. I know there's a bunch of Apple cheerleaders who will argue "720p is good enough", "99% of the people can't see the difference", the chart, "until iTunes has 1080 content for sale/rent", "US bandwidth couldn't handle streaming 1080 content", etc, but 1080 HDTV buyers would still like to at least have the option to deal with any such perceived limitations while having the ability to pump 1080 content (such as 1080HD camcorder content) to their 1080 HDTVs. Also WDTV is one good proof that a company can roll out a little set-top box with 1080 hardware and still sell it for substantially below $200; I've even seen WDTV for less than $100. Apple could do it too.

TV has the simpler interface, and is the only option for DRM'd iTunes purchases/rentals, and is generally the better option if you want to keep everything within the iTunes database structure.
Wouldn't it be great if Apple would blend the "best of" features of both into

TV version 3...
- 1080p/60fps hardware, which would maximize the "720p is good enough" crowd's experience AND also serve the desires of those that feel "1080p or bust". This would also pretty much future proof the device, unlike the current and near-future incarnations
- a normal USB port(s) to which each individual could optionally attach whatever size of local storage they desire, so that their little box could operate without having to leave a computer on
- flexibilty for at least all Quicktime playback formats (so that those people who care about other file formats could get something to serve their needs too).
- the better, family-friendly UI
- iTunes compatibility to the max & iTunes DRM content playback
If I was adding anything, I would wish for the

TV app store so that third party software could leverage the platform into lots of other potential goodies, beyond what Apple seems to want to include themselves. And I would wish for that normal USB port to offer the hardware flexibility for third parties like Elgato, so that those interested in added hardware functionality could buy it through add-on options (just like we can with all our other Apple platform hardware- Macs & iDevices).
That box- Apple TV 3- would be HOTTT. I'd buy a couple of them the first day they come out. I wouldn't even blink at 2X-3X the new one's price for that particular setup. But I believe ALL of the above could be accomplished for less than $199, probably less than $150, and maybe even as low as $99.