Moderately buried in Apple's iTV announcement last week was the peculiar fact that the future streaming media adapter offers only and  (High-Definition Multimedia Interface) video output. These two methods of encoding video seemed a little exotic to me, who only recently upgraded the family 19-inch tube TV (10 years old, and failing) to a 20-inch Dell LCD with DVI and what I considered standard video input - a single round plug.
But I'm just out of sync with the rest of the consumer video world, as I suspect many of you are, too. HDMI, I knew, is common on almost all high-definition television (HDTV) sets; it's a superset of the DVI (Digital Video Interface) standard used for external displays. HDMI incorporates comprehensive audio support that DVI lacks, and using a separate standard, it can to transmit from one licensed device to another, such as between a DVD player and an HDTV set. This is a part of movie studios' and other video copyright holders' digital rights management (DRM) requirement for "allowing" digital copies of their work to be distributed. (All home entertainment equipment with HDMI interfaces deliver the highest resolutions of digital content using encryption. Non-restricted analog outputs are purposely downsampled or degraded to eliminate copying. There are efforts afoot to  from digital devices, too!)
Component video is analog, but considered quite high in quality. In consumer component video, three separate video cables carry the signal. One carries luminance information, which is a combination of brightness (the amount of light energy) and detail. Another cable carries the red component without the luminance values, and a third carries blue minus luminance. Green is inferred from the three components. Because of this separation, images are crisper with more accurate color.
Composite video is what we're all used to, in which chrominance (color) and luminance are combined, forming something that's rather muddy in comparison, but which uses a single cable. This encoding method is the U.S. NTSC standard, which has long been referred to as "Never The Same Color" for its erratic fidelity. The other dominant standard elsewhere in the world is PAL, which is similar.
Although I purchased a relatively recent LCD monitor designed to play video, it turns out that I was already behind the times (though in my defense, my Dell is a computer monitor that I'm using as a television, not a dedicated LCD TV). I checked prices at Crutchfield, a well-regarded online audio/video store, and their least-expensive LCD television set - a - supports composite and component video, as well as S-Video and VGA (listed as "PC Input"). (S-Video uses a plug similar to that found on the old ADB (Apple Desktop Bus) keyboard and mouse cables, and is better than composite but not nearly as good as component.)
To check on pricing for a TV with HDMI, I used Crutchfield's link to narrow choices to; it must be a common search request. Their least-expensive HDMI-bearing set is a ; it includes HDMI and two separate component video inputs, composite and S-Video, DVI, and VGA.
While these aren't expensive options, if you already own a perfectly good TV receiver or LCD monitor for video playback, why buy a new set? Wouldn't a converter work? Unfortunately, no. There's ostensibly no legal way to unwrap the encryption from an HDMI stream and extract the digital content to encode in different ways, such as DVI. Thus, you won't find an adapter for that - and any adapter would require a computer to handle decryption and re-encoding. Component-to-composite conversion, whether S-Video or the single-plug RCA style, requires an NTSC or PAL encoder to change out the video encoding. I've found units for professionals starting over $300, which makes little sense for home users.
Apple has definitely aimed the iTV at early adopters, and it will push some people with older sets over the edge to buy newer ones with the appropriate inputs. That will make consumer electronics makers happy, too, and for all we know Apple is planning an iHDTV that will work directly with the iTV and other products. Remember that most devices called set-top boxes are also TV and cable tuners.
There's another factor at work here, too, which is that component and HDMI encoding make it difficult for an average consumer to extract and record digital video outside of Apple's DRM approach in iTV. Spending some money enables you to record from the component outputs at a decent quality - unless there's some kind of or other watermarking code that will be sent out to distort or prevent analog component recording.
But iTV has encoded in its hardware design the notion that, unlike audio, there are a couple of approved and specific ways of viewing video from the adapter. Not including composite output is likely Apple's way of providing yet another sop to the industry that they must simultaneously court and cajole into releasing more digital content to a wider audience.