As I understand it:
level 1 = expect car to go into ditch if you're not careful
level 2 = hands on steering wheel but it should be ok (Tesla)
level 3 = hands off steering wheel, looking around, expect to have to take over control (Honda's beta test)
level 4 = either taking over control rarely needed, or vehicle has limited ability (e.g. can't drive in snow)
level 5 = you can sleep
The confusion lies around whether we're allowed to watch TV - however I'm fairly sure no country or state has passed legislation allowing us to take our eyes off the road while driving.