Yeah it is a great little app and you are also right it is no where near real time. On my MBP encoding 720p football game(no crop no resize) from ABC from TS it took ~3.3:1. This is far from real time, but with a Mac Pro it could do it in realtime, I'm not sure how much longer it would take to go from 1080i to 720p for the Atv would be.
As a side note if you are really cheap and you don't want to pay for VisualHub you can just download the trial, let it encode the 2 minute sample, then get the ffmpeg command out of the log and encode the whole file. You could also use the command to automate the conversion with a script.
I also tried a 1080i clip from last years SOTU address. Resizing to 720 takes about as long as 720 source material even with the de-interlace, not resizing takes about twice as long. I am not haveing a A-V sync isues, but I am only converting a few minutes of video. I may try a longer show latter.
I wonder if these clips will even play on the Atv? I guess we will have to wait a few more weeks to find out.
How good could it be if it isn't HD?