Walled gardens annoy me. In an era where content can, technically, be reached anytime, anyplace (see Slingmedia, Orb amd Narrowstep) I have to question why any consumer would buy a device that only offers them a single service, no matter how comprehensive it is.
Microsoft's Vista OS also extends the current capabilities of Media Centre Edition and IPTV companies like Akimbo have had to change their original IPTV model to the MS platform when they failed to sell any significant number of their set top boxes. In the UK, Homechoice have had the same problem. And the latest company to join the trend is Verimatrix.
The problem is that only companies with physical networks or the ability to build a major consumer network are able to play in the IPTV market, and by the time they get their services rolled out (just look at how long it's taken AT&T/SBC) someone else will be offering a more open service using the world wide web.
It's probably too early to take count of the score in the TV on IP v. IPTV battle, but I suspect the walled garden is already beginning to crumble in the face of technology.