A: No. It does 720p. There has been a lot of speculation recently about Apple launching "HD+" which would be 1080p content in the iTunes Store. At the moment (December 2011) this is just speculation and nothing has been released yet. It is unlikely that Apple TV will start doing 1080p before Apple has started selling content.
Q: Does it work right out of the box?
A: Yes - and no. You need to have a home network on which there is at least one machine which is running iTunes with home-sharing turned on, the Apple TV needs to then connect to the same network and be able to see this machine. You also need an HDMI cable.
UPDATE (Dec-11): If you have purchased either Music or TV Programmes (*not* Films) from the iTunes Store then these will be available as soon as you start-up your Apple TV and it connects to a network which has access to the internet.
Q: Can I put "x" from my iTunes library on it?
A: No. That's not how it works. The Apple TV streams media from another source (typically your iTunes library, iCloud, or one of the (few) supported internet services like YouTube, Vimeo, etc, or from AirPlay supported devices like the iPhone, iPad, and iPod Touch) it has a very small amount of local storage for buffering but you cannot "put" an item on that storage for viewing later.
Q: Can I use it as an external hard drive for media?
A: No, that's not how it works either - see above.
Q: Does it always have to be connected to the internet?
A: No. But it always has to be able to see it's source. As an example I took it, my wireless router, and my laptop running iTunes and my iPhone on a caravan holiday in South Wales. Despite the wireless router not having an ongoing connection to the internet the Apple TV was able to play streamed media from both the laptop and the iPhone when they were all connected to the router.
Q: Does it have to use Wi-Fi?
A: No, it has an ethernet port (and that's how I use mine). For performance reasons I find it works better with a wired connection (my wireless is provided by a Virgin Media Wireless-N box).
Q: Can I watch BBC iPlayer on it?
A: Directly No, but you could for example use Airplay to mirror iPlayer content from either an iPad or an iPhone to it.
Q: Can I use my iPhone, iPod Touch, or iPad as a remote control?
A: Yes, just install the Apple Remote application from the iTunes store and connect the device to the same network (so it can see the Apple TV) and turn on Home-sharing in the remote app.
Q: Does it play DVD's?
A: No. There is no DVD slot for a start. If you have the time and inclination you could use some software like HandBrake to convert your DVD's, add them into iTunes and then stream them to the AppleTV but the honest answer has to be "No".
Q: So would you recommend one?
A: Yes. Wholeheartedly.
So what other questions would people considering buying an Apple TV want to ask? Leave a comment and I'll try both to answer questions and to keep this FAQ up to date.
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