My guess is they would include a basic remote bundled with the device that was not a full blown iPod Touch but instead a half-sized Magic TrackPad with a gyrosc

My guess is they would include a basic remote bundled with the device that was not a full blown iPod Touch but instead a half-sized Magic TrackPad with a gyroscope and accelerometer. Maybe a headphone jack too. Text input could be done on the TV screen using a pointer since you don't really need to type often when watching video or playing games. I'm not sure it makes any sense to include an LCD on the remote since you would want to be looking at the TV screen most of the time. You could probably use an iPod Touch or iPhone as a remote or pair a bluetooth keyboard for better text input.