Does apple tv replace my computer?

So exactly what dose this little box do?
Here's my set up at home currently.
Connected to my HD tv in my living room I've a pc and a surround sound dvd system. The pc runs iTunes and through that I can play all the music I own which is stored on a external wifi network drive. As well as rent and watch films via iTunes. 
This system used to work fine but the last few times I tried playing rented films I got a lag and sync issues between the picture and sound. I'm not sure why this problem just started, my system mid ish spec but it's got plenty or ram and a fair grafaix card. It is probably that its 4 years old and the processor and on board 5.1 sound card is due a up date. (Normally civilisation spurs my updates and dispite the rest if my system being well up to spec, my processor struggled with civ 5! So it's over due!)
Anyhow with the pitter patter of tiny expenses on the way!
Will the apple tv box replace the pc in the above set up allowing to do all I can now?
So I can still access and play my iTunes library through my tv & surround sound system. As well as renting films from itunes to watch with no problems? All for the bargain price of £99!?
Or is apple the only able to stream files from iCloud?
Can you only get access to Netflix films? (needing a monthly subscription) Or can download rentals and other purches via apple tv box to my iTunes library for watching and playing as and when I want? 
What do I get for my £99 and do I need to subscribe to services to really use it?

Yes, in the majority of ways the Apple TV will simply replace your computer, although replace is perhaps not the correct word. You will still need a computer to house your iTunes library, but it will be the Apple TV that connects to your TV and plays the files.
Yes, you can rent and purchase from the Apple TV itself, netFlix is available but not compulsory.

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