Apple TV is only 720p and 4Mbps IIRC. Too bad when Apple designed AppleTV they didn't think about using hardware accelerated decoding (though the chipset they use doesn't support it anyway).
The HD movies in my local VOD services are 1080i and 5 ~ 10Mbps. The quality is not bad, but still not as good as a high quality Blu-ray disc (many good movie Blu-ray discs uses 1080p and > 40Mbps, which is probably a bit overkill).
Also, the VOD service is provided by the ISP, so it uses "extra" bandwidth, that is, it doesn't use the bandwidth of your internet lines. Of course, this depends on how much bandwidth you get from your localtion. For example, my internet line is 10Mbps/2Mbps down/up, and the line quality can provide something like 25Mbps in total, so I can use internet normally when I'm watching HD movie on the VOD.
The HD movies in my local VOD services are 1080i and 5 ~ 10Mbps. The quality is not bad, but still not as good as a high quality Blu-ray disc (many good movie Blu-ray discs uses 1080p and > 40Mbps, which is probably a bit overkill).
Also, the VOD service is provided by the ISP, so it uses "extra" bandwidth, that is, it doesn't use the bandwidth of your internet lines. Of course, this depends on how much bandwidth you get from your localtion. For example, my internet line is 10Mbps/2Mbps down/up, and the line quality can provide something like 25Mbps in total, so I can use internet normally when I'm watching HD movie on the VOD.