After watching the live stream I was left with mixed feelings.
The new iPod lineup looks fantastic. Quality upgrades all around. But an iPod doesn't fit any uses for me right now. My wife and I have iPhones and my kids aren't quite old enough to have their own device.
iTunes 10 has some nice refinements but not enough to warrant a full version number update. The biggest addition is the Ping social network. This allows you to share purchases, comments, etc with other iTunes users. I don't think I've ever been so uninterested in an Apple product. If Ping tied into Facebook it might be worth looking at but I'm over single use networks like this.
The AppleTV upgrade is interesting. 1/4 the size and less than half the price of the current model its certainly affordable. I already own an AppleTV 40GB and love it. At $99 it makes it easy to simply add another to any TV in the house and use my central iTunes library. The problem with the new version is that it no longer syncs, it only streams. I have a lot of Smart Playlists that rely on play counts to keep things fresh and I believe that streaming doesn't register plays on the central library. A bummer but I could probably learn to deal with it.
Also added is Netflix streaming. There are lots of other devices that have had this first but having it in a single device that works with my huge existing iTunes library is big win for me.