I can get a mediaplayer for 30 quid that plays everything in full HD on TV's, so that capability isn't that impressive these days, it's not 10 years ago.
(people just get confused because atom powered netbooks cannot, shame on you intel)
And your average p&s these days also output to HD tv, that technology is now pretty standard and the only limiting factor is license fees for HDMI and dolby and and and rather than the hardware, but of course archos has the model where you buy the needed licenses later so that's additional cost in many cases.
I agree with commenter Mitchell, it's not a model that I would pick since it's annoying to the customer and makes everything unclear as to what the final complete setup you seek will cost you and if that gets too high you have a disappointed angry customer who feels cheated, so yeah I'd not call that smart business.
But they have the company, and are still in business, even through a recession, so I guess they know the market better or have other tricks that compensate where they fail, like their ability to make their product extremely widely available.

If they have given up nickel and dime-ing the people who buy their products that generally are missing the most important options for success on the product and expecting people to purchase the necessary items that make their products good then the company will start to be taken seriously but when they sell you a video player then you need to buy video converters to make it work the way it should have out of the box then this company deserves the poor negative reviews they get.

Generally because of this bad business model of nickle and dime-ing for features that should have out of the box every person I know who has purchased an Archos product never purchases another. Heres to hoping they dont alienate their consumers with this extremely poor business model.