Despite being one of the few Google TV fanboys, I thought this Amazon Video On Demand screenshot summed up the space well:
The top of the page represents the good: software accessible via various devices and platforms. And content delivered on-demand, quickly and either free or cheaply.
The bottom (highlighted in green) represents the bad: hardware integration that will be problematic for manufacturers, developers and consequently consumers.
"Watch Instantly on Your TV with VIZIO: Now you can watch thousands of movies and TV shows on select VIZIO HDTVs. Order hit new releases and the latest episodes in HD, right from your couch and begin watching immediately. Learn more."
Anecdotally, this is precisely why I am bullish on Google TV: despite being hardware, it integrates outside the TV and is therefore cross-device. The Google platform allows developers to build better products, work across TV sets and manufacturers, and reach larger audiences.