There is some free content, but if you are looking for a "cut-the-cable- type device, this likely isn't it (not yet). It is somewhat similar to iPads in that is does run on iOS and uses apps, but all of the apps are built in (you can't buy additional apps). Netflix and Hulu apps are included, but you do need subscriptions to them to use it. I use Netflix quite a bit and have been very pleased.
Most of the network apps (HBO, ESPN, ABC, etc.) will only work if you are a cable or satellite subscriber. Crackle is free, but not the most engaging content (IMHO). Smithsonian channel and PBS are free and have some decent content. If you scroll down on this page, you can get an over view of the content apps: http://store.apple.com/us/buy-appletv/appletv
You can also play any content you have purchased from iTunes (movies, music, TV shows), rent movies, and it integrates with iPads and other Apple devices via AirPlay.
I have iTunes Match and originally bought mine for playing music, but enjoyed it so much I got a second one a couple of weeks ago for the upstairs den.