Apple TV runs on iOS, the operating system that powers the iPhone, iPad and iPod touch. This means two things: It can run apps and those devices can theoretically run the Apple TV core app, called Lowtide. Exactly like this.
This video shows Lowtide.app running inside an iPod touch 4. Developer Dustin Howett got it from the Apple TV iOS firmware, which he unpacked to extract the Lowtide app. Through some programming voodoo, he got it running in the iPod touch. It's not ready for distribution—and perhaps it will never get to that point—but it works. [TUAW]