I'm starting to warm to the idea of Google TV (although in truth I've read very little about how they plan to make it actually work.)
I don't think it will be this magical do-it-all-in-one box that everyone around here seems to keep looking for in vein. However, it may become something that is worthy of setting next to another box or two in the cabinet.
A year ago, I never thought I would bother getting programs for a cell phone, now that I've had a smartphone for a time, I am impressed with how many little programs I have become grateful for. Google TV could do this, just as they have done with Android. The big question is how useful this will be when the screen is now bolted to the wall, instead of always by your side in your pants pocket.
As suggested before, the limits will really be based on the hardware capabilities of the box, but also the amount of muscle Google puts behind getting content owners to play nice, and the flexibility of the APIs that Google makes available.
Yeah a HTPC can probably still do all the things that GoogleTV will be able to do, but 1) the framework can be more consistent if all apps are developed/compiled specifically for one piece of hardware; 2) a lot of people out there are not going to set up their own HTPC, but would be interested in GoogleTV.
Being able to load a Netflix app that not only gives you full 10UI to On Demand stuff, but also gives you access to manage your disc queue that would be good. A Hulu app that gives you full 10 UI to your hulu + subscription (assuming you want to pay hulu $10 a month) that would be good too. Full BR support w/ bitstreaming of all audio formats, highly doubtful, but probably not the intended market anyway.
-Suntan