Apple tv is a small box that you connect to your tv. With it you can access your itunes account. You can download movies, play music, etc. Now with the IOS5 you can do air display or play that will mirror you ipad 2. thus you can run your apps on the big screen through the apple tv. You can run you tube, netflix, or any app you have.
How does that differ from just throwing your PC display up on your TV via your wireless network (other than it being limited to just the stuff on your i-device rather than everything your PC can do)?