People who are going to be this hung up on specifics aren't people who will be likely Aple TV users anyway, so I don't bother evangalizing to them. I mean sure, Apple TV has it's limitations, but if they are a deal breaker for you then go ahead and move on. There are plenty of streaming DVR devices out there and I'm sure one will suit your fancy. Those of us who choose Apple TV do so because it has the simplicity and reliability of an Apple product at a price point we like. We shouldn't have to justify our purchase beyond that.
Jim - Effect
You're most certainly not being picky - if you want to watch something HD quality you should have expectations about the viewing experience. I'm surprised this isn't addressed directly by Apple of the apple TV site.
Dismissing the Apple TV Objections
1080P, AKA Apple TV's Downfall