I was thiiiissss close to buying an Apple TV – something tonight may have changed my mind. Netflix just unleashed a new box with Roku and here’s all you need to know: $99, access to 10,000 titles that can play instantly on your TV – for free.

For more details check out my longer post on VentureBeat.

Apple did a pretty good job upgrading its Apple TV service in January with a slew of new features – namely movie rentals, but it still left a few things to be desired. The prices aren’t great. There is no rent-to-own option. And the device still has no optical drive and no DVR functionality.

Still, I was more than willing to overlook those to get the device – especially since two of those would be upgradable via software if the options ever became available. Now I’m not sure I could justify buying an Apple TV because if nothing else, I think Apple is going to have to release a new version of the device to compete with Netflix, or cut the price once again.

Clouding my decision even farther is the fact that Netflix has more devices in the pipeline. We already know about one they are working on with LG, but the real kicker could be if they team up with the Xbox 360 or Playstation 3 to bring this instant watch features to those devices.

If Netflix launches a device that also allows you to purchase new releases on top of viewing the instant watch films I see absolutely no reason to get anything else. I can’t see why they wouldn’t eventually do that.

So when that happens, Apple is going to need something more to differentiate their device. I think more than ever now they need to merge the Apple TV with the Mac Mini. Release a device around the $499 price point that will handle all the media center requirements, but is also a full-fledged computer to boot.

Some people may not think they want a true computer in their living room, but imagine being able to use a program like Google Earth on a big screen HD TV. How about browsing the web and chatting via IM? The current Apple TV doesn’t allow for any of these things, but maybe it should. How about some games as well?

Basically what it comes down to is that I want one set-top box in my living room. If Apple would simply merge the Apple TV with the Mac Mini, that could certainly be it. Otherwise I’m probably going to buy the new Netflix box instead of an Apple TV. If I really need to watch a new movie for now I can either a) rent it from Netflix via mail b) Buy it on demand via cable c) download via some other means and stream it to my Xbox or d) buy it via Xbox Live.