I have an AppleTV v2.  It does indeed require an outboard DAC before it 
can render analog audio.  An outboard DAC with an optical input no less.

If I wanted to use the AppleTV as an audio output device, I would need 
to either:

Using TV interface -

Turn on Stereo
Turn on DAC
Select AppleTV input on DAC
Turn on TV
Select AppleTV input
Wake up AppleTV
Navigate to Music options
Choose and Play

Using AirPlay -

Turn on Stereo
Turn on DAC
Select AppleTV input on DAC
Wake up the AppleTV (it sleeps)
Grab a laptop or iPhone and fire up a music player
Navigate to music, choose and play
Select AppleTV AirPlay output

Granted some of these steps may be avoidable (stereo already on or 
auto-sensing, DAC has only one input, etc.), but this is still a lot of 
switching and selecting just to play a few tracks.

I'm not at all excited about the option of using a 50" plasma TV for an 
audio controller UI.  Seems ridiculous.

And you still don't get sync.

And I don't know about the audio quality implications of AirPlay - does 
it do lossless? (certainly not FLAC), is there compression in the 
transmission?, etc.

I don't really see this as a big use case for the AppleTV until Apple 
adds analog outs and gets serious about simplifying usage.
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