The new Apple TV is fantastic!

Downloading and watching recent movies -- in high-definition, from the comfort of your living room -- is a stupendous experience. It could become habit-forming (exactly what Apple probably has in mind.)

First, a little history.

I've had a test unit for months. Because of Apple's ( AAPL) long history of innovation, I figured this would be a killer video device that every person on the planet would want to own. You know, like iPods and iPhones.

When I originally received the device I couldn't wait to try it. It handled music very well. But videos that had been downloaded to play on an iPod looked absolutely dreadful when played on my HDTV screen. I was highly unimpressed.

Apple TV

Despite its shortcomings, I thought Apple TV had lots of potential -- but not in that original form. Video playback would have to be improved. Obviously, Mr. Jobs had the same thought.

So, when Apple sent me an email and told me they had just published a major software update for my Apple TV box,,I couldn't wait to try Apple TV 2.0

You already know that I now like what I see (and hear), but first some hardware details.

Apple TV is a very small, single-purpose computer (7.7 by 7.7 by 1.1 inches, 2.4 pounds). It will connect your wide-screen TV via a component or HDMI cable (sold separately) and also to your high-speed Internet connection at home via Wi-Fi (802.11g/n) or Ethernet (10/100BASE-T). Audio is handled by analog RCA jacks or the optical digital port. There's also a USB 2.0 port and IR receiver inside.

The device must be electronically "linked" to either a Mac (Mac OS 10.3.9, 10.4.9 or later) or PC (Windows XP, Service Pack 2 or Vista) desktop or laptop. Your computer's copy of iTunes is the conduit for buying and charging music and video content.

It also comes with a cute little remote to handle music and video choices from across the room. Be careful what you press and where you aim -- the remote also controls any nearby Mac computers.

There are two Apple TV configurations available now. There's a 40 GB model ($229) and the 160 GB ($329) model. Obviously, the larger hard drive is capable of storing up to four times as many audio and video files. Duh!

In a previous life, Apple TV had to connect to your computer to get all of its content. Now, Apple TV connects directly to your iTunes account. That allows you to download and receive content directly to your box. So you know: You can download, watch and listen on your computer or your Apple TV box (the subject of this review).

ITunes' available content pool is growing. In addition to all those music files, you can now rent movies via iTunes. It costs $3.99 for a standard definition movie and $4.99 for a high-definition movie. The rental period is 24 hours. You can watch the movie as many times as you can stand to during that period. After 24 hours, the download disappears.

Once you set up your iTunes account (which means inputting your credit card information), you're all set. Choose a movie, press the button agreeing to the rental, and the movie begins to download. Amazingly, after about 45 seconds or so, Apple TV is ready to let you begin watching.

Appropriately, I chose the fabulous Disney/Pixar feature Ratatouille to test the system. All I can say is wow! Apple TV video quality is spectacular. The audio is pretty special, too. All in all, video rental has never been this quick and easy.

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