- TV with everything for Internet access built into the TV screen. Of course the Internet access modem isn't included.
- TV connected to a box, which has everything in it for Internet access. The TV is only a screen in this case.
Category 1 includes the Sony NSX-46GT1 with built-in Google TV.
Category 2 includes the Apple TV.
My own TV has Internet access according to point 1. All User Interface (UI) for Internet access is through widgets. In this case they are applications that don't take up the whole surface of the screen, usually about 25%. The reason I don't use it is that it's too slow. Getting the data from the Internet to the TV is quick, but the UI is too slow. After I press a remote control button to get access I must wait for the widgets to load and that takes a minute or more. The widgets, once loaded, are Ok. There's a news widget, a stock widget, a weather widget and more.
However I prefer to use the TV according to point 2, i.e. I have a Windows PC standing next to it and connected via HDMI. That works quite well. Browsing (Chrome browser) is quite pleasant, particularly if I put the zoom-factor above 100% (I use 144%). Zooming puts most of the junk on the page-sides outside the window and makes the text quite readable. The eye-TV distance is 3.3 m = 10 ft and screen size is 46 inches.
So why don't I use it more for Internet access? The PC has a start-up time of a minute. There are more people who want to use the TV at the same time. I need to make table space for the mouse and put the keyboard on my lap (both are wireless). In fact the PC-TV combination is mostly used for watching the family's photos, and not for internetting.
Another weakness of type 1 is technical and economical. Screen technology and Internet technology develop at different paces. As an example suppose you buy an Internet TV today. The processor may be acceptable today, but will not be so in 10 years. I say acceptable, because no one is going to put a powerful processor into a TV. The screen will be Ok for many years, but the Internet access may become frustrating after 3-4 years. To fix that you'll either stop using the TV for Internet access, or you'll buy a box, and then you have a type 2 solution.
There's a parallel here with TVs with a built-in DVD player. Those devices didn't become feasible until the DVD player component came almost for free.
There's much more to say about this, and that's why I stop here.