Well, ever since Microsoft bought a fair share of Apple back in, whatwasit, 1998?... I think they've started to see competition differently. Microsoft needed Apple healthy in order not to be broken up in their antitrust process and Apple needs Microsoft to continue developing Office. They had a five year (which of course has ended by now) thing going on about sharing stuff. Cross licensing. I'm not sure how it is today, but I'm pretty sure that Microsoft won't sue Apple and vice versa about such things again. They've settled the GUI dispute etc. But we're going major off topic here.
The question for me still is whether Apple should take the iPod and grow it into some kind of TV settop box or whether they should take a Mac and scale it down to one. My guess is that Apple wants neither. They still want us to use Macs and iPods to achieve the same, and they want the next TV revolution to happen on the internet, not the cable or satellite. They want us to buy stuff from iTMS, so they might never add a TV tuner to a Mac, an iPod or an AirPort Extreme successor.
So: Front Row, in my opinion, sits well on the Macs. The iPod is "to go".