Well, I saw some pictures from Apple's intro for the iPods and movie service. Steve demoed the iTV ($299, Q1 2007) which wirelessly connects to your Mac (?PC) to browse all your content (music, TV, movies) and can even stream movie previews from the iTunes store. I didn't catch anything about playing your regular DVD's (the movies from Apple are 640x480 H.263) probably because it is too much data.
Presumably, this device is designed optimized for their content with their encryption, not what you provide (ripped DVD's, DVR stuff) yourself.
I guess it's cool to already have a device that does all that and more.