I have had the appleTV since they released it and have all three versions. At first I didn't like it when they made the switch to streaming away from hard drive but I bet it had to do with cost. I can't remember how much the first gen with 160gb cost but I think it was close to 300, maybe more. 160gb won't hold all my digital copies I have on iTunes, heck even 1 TB won't be enough, I had to upgrade my home computer to 3TB to hold all my iTunes files and still have room for more.
So I have come to like the streaming, I do not mind streaming off my home computer but I would not like it if I had to stream thru the Cloud. I have never had any issues with AppleTV streaming, it always works smoothly for me.
The one thing I hate about the AppleTV is the Optical out as the only audio output. I wish it was coax. Of course eventually I think HDMIs for Audio will be more widely available as a digital input on D.A.C.s in the future. Like the new NAD D.A.C.
I also use my AppleTV to watch TV via NetFlix. I do not like most of the newer shows on TV so spending a chunk of money each month on cable was a waste, know for just a few dollars I get old TV shows to watch when I want to watch them, yes it may not be HD but who cares, it's TV. If I like it that much I will buy it on Blu-Ray or DVD anyway.
I do not use the AppleTV to listen to music, when I want listen to music I spin vinyl.