I've been thinking some more about this rumor and the CES 2012 announcement to me doesn't make much sense (yes, I know the original xbox was announced at CES), unless it's a new hardware revision.
AppleTV-like to me implies that it's focused on content delivery so here's a theory there will be a new hardware revision with a 32nm die shrink, 8GB of internal flash (hard drive slot still), no optical drive, 1 USB port, HDMI only.
With the shrink and no optical drive, power dissipation could drop by 50% or so allowing for a much smaller form factor.
For this to work, MS would have to deliver all of it games digitally, but that's not in the realm of impossibility.
So now you have a sub $200 (maybe even 150) AppleTV/Roku competitor, but instead of just Angry Birds, you can play all your Xbox games on it.