The diminutive 8-inch-square and 1-inch-high Apple TV works a like a charm and is a cinch to set up. Just plug everything in, note the five-digit code that it displays on the TV screen, and enter that number into iTunes on your computer. Things get a bit more complicated with Wi-Fi, but even here the Apple TV's setup is easier than most--if you stick to the established 802.11g standard. Interoperability issues between some current draft-n products forced me to use Apple's own AirPort Extreme Base Station to get the Apple TV to operate over an 802.11n network (it's the only 802.11n media streamer in the group reviewed here).
If you can play a file in iTunes on your PC, you can play it through the Apple TV. But that means no .wma music or Xvid videos, without converting them first. Aside from a few video podcasts, 720p movie trailers are about the only HD content currently available for the Apple TV. Most iTunes Store videos are encoded at what the company describes as "near-DVD" quality. They still looked pretty darn good in my tests, but as Apple says, they are not quite at DVD level.
The Apple TV uses iTunes to transfer selected video and music to its built-in hard drive (40GB on our US$299 review unit, or 160GB on the US$399 model). You can transfer photos by directing iTunes to a folder on your PC, or by using software such as Adobe Photoshop Elements 5.0.
The Apple TV connects to wide-screen TVs only, via an HDMI, component, or analog connection. Apple TV decodes movie files at up to 720p resolution, and it can up-convert them to 1080i, the maximum resolution it can display.
The minimalist but easy-to-use remote has a ring-shaped section for playback control and a Menu "go back" button.
Test files that the Apple TV could play looked great. I saw no blockiness in the streaming video, and images looked naturally sharp without any signs of artificial edge enhancement. Using 802.11g Wi-Fi produced some unwanted video pauses, but everything moved smoothly with Ethernet or 802.11n wireless. Sound-wise, I detected a very slight harshness in Pink Floyd, but nothing I was likely to notice with the volume set at a regular listening level; Itzhak Perlman sounded perfect.
Apple plans to improve the Apple TV's features over time (as evidenced by the YouTube streaming update); meanwhile, a number of unofficial hacks (including keyboard/mouse support, the ability to install OS X, and DivX and Xvid file playback options) have surfaced online.
If iTunes and an iPod are the beginning and end of your PC-and-Internet media world, the Apple TV is a great choice. But if you dislike those limitations, keep looking.