Apple TV is great as a supplement to "broadcast" TV. You can rent movies and old TV shows in Netflix or iTunes. You can watch
YouTube and Vimeo videos. There are, I think, 3 sports channels you can watch also.
Where Apple TV really excels for me is if you have an iPad, you can use AirPlay to stream lots of stuff from your iPad to your HD TV via Apple TV. There's a VLC Streaming app that actually lets me stream pretty much any videos I have on my PC to my TV via the iPad to the Apple TV. It works really well. (The only problem I have with it is the lack of 1080p, but the new Gen 3 Apple TV has that!)
So it could, conceivably, replace premium cable stations, depending on what you watch. It would not replace normal, "broadcast" TV, because, as OKW Lover says, you won't get things like the news, or local broadcasts. And I believe there would be a delay watching regular TV episodes, assuming they are available on iTunes or Netflix.
Also, be sure your TV has an HDMI input, because that's the only kind of connection Apple TV takes.
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