According to AppleInsider, Apple could be looking to launch full 1080p HD video rentals through its iTunes software as early as September. Currently 1080p content has not been available on any Apple platform through iTunes, be that via a Mac or the Apple TV. This could soon change as “people familiar with the matter” have told AppleInsider that certain films are now being submitted to Apple in three formats; including 1080p.
One such film from 20th Century Fox was said to have arrived with encoding options for SD (480p), HD (720p), and a new, third format listed as HD+ (1080p). Similarly, a small number of upcoming releases from two of the other 'big 5' movie studios were submitted with optional resolutions of 1920x1080 and an average bitrate encoding of 10,000 kbps.
If this turns out to be true, it can only mean that Apple is looking to release an updated Apple TV; to enable it to play 1080p content. The current iteration only supports a maximum resolution of 720p; due supposedly to hardware limitations. There has already been rumors pointing to an Apple TV 3 with the powerful A5 processor. This would be enough to handle the 1080p content!
Another problem to consider is internet bandwidth; you would need a very fast download speed to enable streaming of 1080p content. I struggle to stream standard definition content with my connection!