I think it was meant for connecting an iPod dock to, but somewhere along the line someone either nixed that idea or it simply hasn't been rolled out yet.
Perhaps the delays in Leopard and launch of the iPhone sucked a lot of OS resources from non-critical products like the AppleTV.
I'd like to see a lot of general updates to AppleTV (seeing my own videos on YouTube, searching by categories/tags/subscriptions), but that and $.50 will get you a can of soda, and that's about it.