There would be no on/off switch on the TV. You’d just sit down on the couch, pick up your iPad (or iPhone or iPod touch), start using an app, and the TV would turn itself on and start displaying the AirPlay stream. No fumbling with remotes. No numeric keypads and up/down/left/right buttons. Just touch, swipe, and speak to find what you want to watch. You’ll never plug a set-top box into this thing, and you’ll never want to.
That’s pushing it too far. There will be an on switch, and it will work as an off switch too. The reason? TVs suck vampire power when they’re sleeping. And you want to give people the option to completely turn their TVs off.
I wholeheartedly agree that the typical remote with channel up and down buttons will be history. Most likely Siri or some iTV app like it will be the main user interface to iTV. But I disagree that AirPlay will be as prominent as it is now as the gateway that connects iOS devices to TVs. Why would Apple deliver content to the iPad or iPhone or iPod touch first and then stream it to iTV? Apple wouldn’t do that. Instead iTV will be just like an iPad or iPhone where content gets directly beamed down to it via iCloud.
That doesn’t mean AirPlay won’t exist. AirPlay will be beneficial when you have friends over that want to share what they have on the big iTV screen. But for the most part content on your iPhone or iPad should already be on iTV, too.
PS: I forgot one thing. AirPlay is an important component in another way: when you’re playing games. AirPlay connects the iPod touch or iPhone or more than one of them to iTV. With iOS games gaining critical mass the ability to innately connect and play on the big screen, e.g. iTV, would be a feature that probably won’t be overlooked.