Is it a modern console, playing new AAA-level (or even AA-level) content?  Is it going to be primarily a classic gaming device?  Something else?  

Pretty much.

Combination of NES Classic and Nvidia Shield/Ouya, not too complicated. Could be cool if executed properly.

Everything seems to indicate its a Nvidia Shield TV with an atari logo for me so far I don't expect a lot.
Deffenitely not competing with Xbox and Playstation with the lack of a disc drive

It ll be weaker than a (docked) Switch is... but maybe have a few Android games in its stores, along with some old atari games.

Likely it ll be a Tablet chip of some sort.

So its a modern console.... on the very weak end, without much 1st party (do atari have any studio's?).

I think its going to fail.

Yes, the one that butchered Rollercoaster Tycoon.

probably something like the nes classic

The company with the name Atari was originally known as Infogrames, a kind of meh developer, they bought out Hasbro Interactive who owned the Atari name and rights to some of the companies IP, their biggest IP is Neverwinter Nights but since the original developers are not involved I wouldn't hold my breath. They also own Cryptic Studios, and Namco owns a slice of them.

As for the device I think it's going to be a Ouya type device at worse, or a sort of streaming/steam machine at best. It probally will not catch the world by storm.

I was thinking about the big games from the original Atari systems. But, I realize now that a lot of those are Activision, Namco, and Nintendo properties.

Considering they said they would use "modern specs", this has to be some kind of finantial scheme. No company is that delluded to try and compete on the dwendling and oversaturated console market while having none of the infrastructure, money or established userbase of the big three. Even the OUYA was marketed as a microconsole.