720p is fine for a consumer device as long as the usability is there. That's why I still prefer VHS tapes to DVD, despite the lower image quality.
Mandatory 15min previews of new Pixar movies before you can watch your download? No roblem.
How long has it been since you had a complete physical checkup?
On balance I find tapes easier to use and less frustrating.
I am not prevented from skipping the FBI warnings, studio logos, legal disclaimers, previews, and other nonsense.
VHS tapes are much more robust. I've never had to clean one, or have it not work. DVDs have conniption fits over a few fingerprints, and if they get scratched, forget about it.
And if you do have to remove and clean a DVD to resolve a freeze-up, you then have to navigate through menus to get back to where you left off. With VHS, you can stop the tape, remove it, turn the player off, and come back later and pick up exactly where you left off.
Yeah the VHS picture is not as good as a DVD, no argument there. But for a typical Hollywood movie on a TV at home, it's good enough. Certainly no worse than the haphazard stutters, pixelization, and freezes one experiences in a typical DVD viewing.
Now, consider the iTV. Fingerprints and scratched media, not going to be a problem. Picture quality, at 720p, good enough for the masses, especially for a $99 device. If they can bypass the studio-imposed inconveniences and make using it a frustration-free experience, they will sell plenty of them.
I despise the FBI warnings; I'm from Canada, try and catch me! We're apparently the kingdom of video pirates as is, obviously the FBI warnings aren't doing shit here as is so why do I have to sit through them, plus a bunch of other anti-piracy warnings, sometimes in like 5 different languages.
I haven't switched over to bluray yet. Too expensive and the extra image (1080 vs 420) isn't worth it for 90% of movies and TV shows for me and those that are I can stream 1080p through my xbox.