I like the digital copies, but my point was more about using the collection you already have. I've written in this forum about it before, but I'll write it again in a condensed version. Of all the music on the average ipod user's ipod, only 3% of it was purchased via itunes. The rest was from that person's own ripped collection (and before people say P2P, this study was conducted several years ago by Apple to an anonymous sampling of ipod and itunes users, and P2P content was excluded). Once apple offered an easy and seamless hardware/software experience to manage their 300 CDs, the ipods flew off the shelves, and the rest is history.
An AppleTV is no different. It's just an ipod that connects to a television and manages a person's video collection. Enable people to take media they've already purchased and place it in a more manageable interface, and you've got the next ipod. Enable them to also shift it to their ipod touch and iphone, and it's even better.
Digital copies are great, but I'm not buying what I already own, again. "You've Got Mail" isn't going to look any better on Blu-ray. What I want to do is take my entire collection I already own, and place it at my fingertips to use as I see fit. I have already done that, but not everyone's cut out to rip and encode. And that's where Apple can move in and yet again revolutionize the game. Blu-ray uptake isn't taking off as well as the Blu-ray consortium wants you to believe, simply because people are a) tired of buying the same movie again and again b) many movies aren't going to look markedly better and c) those blue DVD cases aren't cheap, and the economy isn't looking great right now.
Blu-rays aren't as cheap as DVDs are and in this budget-conscious time, it makes alot more sense for the large movie-buying masses to grab 4 DVDs in the bargain bin for $20, as opposed to one for $30.
The last thing that I think alot of people are miffed about is portability. People over the last few years have sunk money into a DVD player for each room, a DVD player for the car, and a portable DVD player for when they are out of town, and they can buy one DVD for all of them, or limit themselves to playing their Blu-Ray in one, maybe two locations where they can afford players. This is another place Apple can step into and say, "Hey! Feed your disks into the itunes media center, give it some time to encode them, and then play this movie via your computer, apple TV, ipod, ipod touch, iphone, or plug a cable into your ipod/ipod touch/iphone and play it on a television." The Real / MPAA lawsuit will determine what happens there, but I think Apple has enough sway to approach the MPAA and DVD consortium and convince them that with the right copy protections put in place, this is a good thing, not a bad thing.
Holla!!