I think you left out one consideration: preempting the Zune/Microsoft.

I suspect that the other shoe will drop shortly before or after the Zune makes its way to market: a big-screen iPod, maybe even with a phone and camera, as well as the iTV. Seriously, the Zune looks okay, they have every opportunity to make it work, and the wireless "send me a song" bit looks like a winner with teens. Maybe Steve was holding off on the big cannon until they peek their heads out of the tent. Then, Boom! iPod phone! iTV with streaming Google/Apple video! Big screen, 3-D feelovision! (Oh, maybe not that.)

On a more sober note, I finally hooked up my iPod and played a movie into my early 2001 Sony 27" TV -- nice, but not HD -- and the picture was really better than I expected. I had started with an ABC preview, thinking that would be using the new encoding. It wasn't. But the 640 x 480 movie looked, honest-to-God, near-DVD in quality.

I believe Apple intends to have the TV manufacturers imbed this iTV into their products (i.e. the guts of iTV). That would lock Apple into the TV industry. It works with Macs and PCs so what would be the hold up? iTunes?

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Most TV's I've had the joy of hooking up have composite video, maybe S-video, but not component video. Seems like a lot of people might be left out of the iTV game.

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Yup... once again, Maccentral confuses component video and composite video. Component video isn't "for older sets", it's somewhat newfangled and definitely high-end. Composite video -- the single-wire RCA plug that goes into the "video input" of your TV or VCR -- that's the old school job.

So yeah, if this iTV thingy only has HDMI and component inputs, it's definitely leaving out everyone who doesn't have a new, fancy HD TV.

:d