Apple has made a significant move away from Apple TV 1 with Apple TV 2 - I've seen references to 'RedBox' for the home, and that is what ATV2 clearly is.
Apple has probably looked at their customer data, I suppose, and realized that very few folks are *buying* movies, but are, instead, renting. So, why not skip the whole storage thing and build an ATV2 that targets that use case.
For folks like me (and probably every single aTV Flash customer out there), there is a big hole in that strategy - purchased and 'archived' videos. I have purchased an embarrassing number of iTunes TV shows, but I also have 'archived' a huge collection of my personally owned DVDs and Blu-Rays; all stored now in iTunes on my Mac Mini.
All stored in iTunes... Now, if you have a non-trivial Movie collection, scrolling through a flat collection of hundreds of movies is a horrible user experience.
The new ATV2 ditches the 'sync'ing' paradigm of ATV1 and moves to a pure streaming play. In effect, when you want to stream something from the family media server (i.e. my Mac Mini), you now have a FrontRow experience. Why is that a problem?
So, my 8 year-old goes into the home theater, fires up the TV and scrolls to the Movies menu on my ATV1. She sorts movies by category/genre to 'Kids & Family', and looks for movies with the little blue dot (unwatched). And, off she goes. FrontRow has neither the ability to see which movies are unwatched nor the ability filter by genre. FrontRow absolutely sucks - I can't even get my video covers to show up, on my MacBook Pro w/ MiRow installed, but I digress.
Also, I'm not sure what happens to Parental Control w/ FrontRow - I've never turned that on in iTunes, but I use it with ATV1 and it's been a real plus. Again, my 8 year-old and watching movies.
If you can do something to clean up / improve the media browsing experience while streaming iTunes to ATV2, you will have a winner, because the current experience sucks. Maybe this what you folks had in mind with 'MiRow'. I bought it, because I want to support your efforts, but I don't see what it does that is interesting, so far.
Sorry for the rant,