While the hype is targeting the iPhone, the Apple TV is a more interesting device. The market for cell phones is relatively mature -- there's plenty of good and great cell phones out there -- which makes me skeptical that the iPhone will be a dragon-slayer. But the market for Internet video is a mess, much the same way the digital music market was when Apple introduced the iPod and iTunes in 2001.

Oh, I'll admit it -- part of my bias toward the Apple TV is personal. I'm not a heavy-duty cell phone user, but I'm a champion couch potato who owns two TiVos. I'm just more interested in TV than I am in cell phones.

The digital video market is much the same shape as the music market was in 2001. There's a lot of digital video available, in YouTube, in video podcasts, and full-length TV and movies, both on legal services like iTunes, and pirate BitTorrent networks and other peer-to-peer nets.

But, if you want to watch the stuff, you've got three choices: Sit at your desk and watch it on your computer, transfer it to a handheld video player like the video iPod, or somehow transfer it to your television using a home-built home network or by burning it to a DVD. Most people don't want to watch video on the PC or handheld devices, and they don't want to hassle with figuring out how to get the video from the PC to their TV.

Apple TV works with iTunes just like the iPod does. It plugs into the TV using a cable and connects to a PC using an 802.11n network.

When connected to a Mac or PC, the Apple TV will show up in iTunes just like an iPod, allowing users to sync television shows to its hard drive just like transferring songs to an iPod, Jobs said. Apple TV can only sync with one computer, but can play content streamed from up to five other computers. For example, if a friend comes over with a notebook, the friend could stream the latest episode of Lost to the Apple TV, but it doesn't appear that he could transfer the file to the Apple TV's hard drive.

That's pretty neat, and tempting. Where's my credit card?

There's still a few unanswered questions:

• Will the 802.11n connection be robust enough to extend from the den, where many people keep their computers, to the living room, where the TV is? Will the connection be fast enough to get a whole movie or TV show from the computer to the TV quickly? If it takes a few hours, heck, I can drive to Blockbuster, rent a movie, come back home, and watch the movie in that amount of time.

• Do I need a card for my PC to support 802.11n? Do I need to buy a base station supporting 802.11n (which Apple will sell me)?

• How closely is it tied to iTunes? There's a lot of free, open-protocol video out there on the Internet. There's video podcasts, there's YouTube, Google Video, and Yahoo Video. Can I sign up for any video RSS feed and have it delivered to my Apple TV?

• Let's not forget pirated movies and TV. Sure, it's illegal -- but the people now viewing those shows and movies on their PCs are a natural market for the Apple TV. Can users transfer BitTorrent videos to their Apple TV? Note that I'm not advocating video piracy here. I'm not going to have that discussion in this post. I'm just reporting an economic reality -- if Apple TV doesn't support open protocols, they're losing out on a big market.

• Likewise, is there some easy way for Mom and Dad to transfer videos of baby's first steps to Grandma's Apple TV? Grandma's no ignoramus, but she's too busy running her Web 2.0 startup to mess around with hacking the Apple TV.