According to an Engadget source—the same one that said the next AppleTV would be a $99 unit with iPhone guts—Apple's next TV device will be rebranded iTV. And it will have apps, but it won't play 1080p video.
That last bit has supposedly been a point of contention for Apple, but apparently the new unit's internals—reportedly an A4 CPU and 16GB of flash storage—can't quite handle 1080p or 1080i playback. The source says that the iTV will bring apps to televisions, though there's still no information on how that will work, or if it will be able to run apps designed for the iPad or iPhone. Interestingly enough, iTV was the original name for the AppleTV, before they named it AppleTV.
While the idea of apps on the TV seems like a grand breakthrough in (d)evolution of the Couch Potato, it'd certainly be a bummer if Apple's new push into the living room couldn't play our biggest and best files. And I still want something like this. [Engadget]