Hi
Important consideration before starting:
Whats sort of TV do they have?
Why? Well, AppleTV really needs a widescreen to work best, and additionally it must have either HDMI or component/audio inputs to connect it, as AppleTV does not have composite or S-Video outputs.
I don't know much about VUDU but it looks like a streaming internet movie service that doesn't need a computer - is that right?
AppleTV isn't quite the same, you may or may not be aware of some things:
AppleTV requires a Mac/PC with iTunes to transfer content to AppleTV across the local network (wired ot wireless). If your media content is larger than the AppleTV hard drive (or you just want to) you can stream the material to AppleTV from the computer as you watch it, network permitting. Media ontent is either purchased from iTunes store or added to iTunes by the user - 'rolling your own' is easy for CDs as iTunes can just import them but it's more cumbersome to import your own DVDs etc. even if 'fair use' etc would allow you to do this in your country as there is no official way to do it from Apple.
Currently AppleTV does not allow you to purchase shows/movies etc itself - this might change but no one knows for sure - so you purchase stuff from iTunes on the computer to then watch on AppleTV. As you can already watch previews of shows/movies from your regional (user selectable) iTunes store there is anticipation that you will eventually be able to purchase via AppleTV. A rental system has also been rumoured but I must stress there are no hard facts and these things may not happen.
There is one universal AppleTV model that comes with 40GB or 160GB hard drives - the only thing that might differ locally is the mains cable plug which will have different pins for different countries but the usual adapters will work for these.
Provided the relatives have a US based iTunes account they should be able to purchase stuff from there from anywhere worldwide as the store uses the account rather than geographical location at the time to show what's available - this is my understanding anyway.
I'm in UK and we've only recently had TV shows/movies to buy via iTunes UK store - basically every country has it's own store content, partly driven by what people want locally, but for movies etc driven by controls imposed by the movie companies more than Apple.
Hope that's helpful.
AC