I called Apple to see if they can help me with my dead AppleTV2 and they said I can bring it in for an exchange. I asked that since I have the 2nd generation model, will they be able to replace it with the exact same model? The response, "Of course! They can find one for you!" I'd like to see this happen, considering they no longer make the 2nd generation, are out of stock online, and are fetching for about $200 USED on ebay.
That being said, if they offer me the ATV3 (bet that they are) should I take it, or sell this broken one on Ebay for money to buy a HTPC?