it will be much more than it. it's a platform not a device. it's android based soon more and more will come to it for it's easy to develop for.
regarding 1080p i did some tests 330 on a atompc + nvdia ion and there were no issues with full-hd, not heavy on the cpu at all, anyway the chipset in this first version of googletv is slightly different, intel has embedded the video decoding into the cpu as well as all the gpu into the new atom processor, still it should not weight on the main processor.
the atom pc, even the singole core had no issues with .flac files trough foobar and realtime dsp (chances are there this kind of platforms will soon be a cross-over eq room-correction music server trought its digital exits to multiple dacs-amps).
it has hdmi spdif and usb outs, also an ir blaster to control devices vith remotes such as many volume controllers on amplifiers or hometheater stuff.
i pre-ordered one, hope to be running some tests soon.
There's other "platforms" that play 1080p media and are networked for a fraction of the price. OK, so the WDTV or the "Seagate GoFlex TV HD Media Player" (STAJ100) don't include slick wireless keyboards. But, beta firmware for the WDTV Live has added keyboard support.