
The Remote HD third party add-on for a first generation Apple TV adds the Airplay functionality found the the second generation Apple TV. When Apple introduced the new Apple TV it decided not to bring any of the features over to the old Apple TV.

The first Apple TV is basically a cut down Mac with either a 40GB or 160GB hard drive. The key selling feature for me was the option of synchronising iTunes content from a computer and being able to display it on a TV without requiring the laptop to be connected up top to the TV. This is how we had been watching much of our digital content before.
However, there is a bit of setup time required getting the laptop plugged in each time and sorted to play. With the Gen 1 Apple TV music, photos, TV Shows and Films can be stored underneath the TV. If you have your computer playing out iTunes you could use the Apple TV Gen 1 to play out audio but not video content from your laptop.
With the Gen 2 Apple TV the plan shifted to creating a wireless media extender based around what is basically a screen-less iPhone with no storage. At the time it was suggested that consumers didn’t want to have to deal with storage, but this of course removes the ability to have the laptop switched off as was the case with the Gen 1 device.
The advantage with the Gen 2 device however is the ability to “AirPlay” audio and video from a laptop unto the Apple TV. You can therefore start watching a video on your iPhone or laptop and stream it to the Apple TV to display on the TV.
The Remote HD adds this functionality to the Apple TV Gen 1 so that you can stream from your iPhone with video.
