According to Engadget Apple TV is not only not dead but it is coming soon as a totally revamped item that will bring streaming media to your TV. According to the post-
The new architecture of the device will be based directly on the iPhone 4, meaning it will get the same internals, down to that A4 CPU and a limited amount of flash storage — 16GB to be exact — though it will be capable of full 1080p HD (!). The device is said to be quite small with a scarce amount of ports (only the power socket and video out), and has been described to some as “an iPhone without a screen.”
I’m not surprised we’ll be seeing something based on iPhone OS since I already used my iPhone and iPad in a pretty similar manner to what I did with my long-sold Apple TV. When I want to watch something I simply plug it into the adapter and I am good to go. Having something that is always connected will be nice though. This is especially true because of the big news Engadget broke… the thing is expected to sell for just $99.