What are the "pros and cons" of the original Apple TV? Is it right for my needs?

Please note that the original Apple TV has been discontinued. However, this Q&A has been updated subsequently and is quite useful for anyone interested in purchasing one on the used market.

Like any other purchase, only you can make the decision whether or not the Apple TV is worthwhile, but you can evaluate the pros and cons of the device to see if your needs are met. This summary may be helpful in making a decision:

Pros:

• Fairly small and sleek case design.
• Easy to use interface.
• HDMI, component, and optical digital audio out ports make connection to recent televisions quick and easy.
• 802.11n support standard. Usually "streams" content without problems over an older 802.11g network as well.
• Although not supported by Apple, it is relatively easy to upgrade the hard drive and hack.
• Dedicated graphics.
• Cheaper than the Mac mini, although generally less capable as well.

Cons:

• Limited functionality -- does not play CDs or DVDs or have any ability to record programming.
• No cables provided as shipped. Compatible cables had to be purchased separately.
• No support for the majority of older televisions.
• Limited capacity hard drive in the original configuration, larger capacity 160 GB version introduced on May 30, 2007 (MB189LL/A).
• The processor cannot be upgraded.
• Limited support for audio and video formats, although hacks are available.
• Photos cannot be "streamed" only "synced".
• As originally shipped, no ability to purchase content directly from the Apple TV and limited support for streaming video directly from the Internet.
• Originally no support for "true" 5.1 channel surround sound (added with a subsequent software update).
• Relatively expensive for the functionality provided.

Basically, if you wanted an easy way to present the iTunes content stored on your household computers on a recent television when the original Apple TV was released, it was worth consideration. On January 15, 2008, Apple also added the capability to rent movies directly from the television via Apple TV.

On May 25, 2018, Apple stopped supporting the original Apple TV in iTunes.