The idea is that it will leverage the Apple A4 processor to run iPhone OS 4 to power the appliance. The size of the said appliance is roughly equivalent to an iPhone without a screen. This make a whole lot of sense when you take in consideration what the iPad/iPhone can do with all those applications.
The device will output at 1080p using some sort of dongle and take a small power cable input… that’s it. One can be sure that the device will support both WiFi and BT to interface with your home network and nearby devices like a keyboard.
What is interesting is where this might lead. Imagine running games similar to the ones made for the iPad on your TV! This thing has the potential of turning into a gaming console. Sure it won’t beat the XBOX in performance but the sheer number of games will make it attractive for casual gamers.
Add Netflix, ABC player, etc, etc to the mix and you get a full entertainment solution.
Be sure to keep an eye on this thing! Oh yeah, did I mentioned that the expected price be around 99$?