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There have been all sorts of rumors flying around about the next generation of the Apple TV. But, Steve Jobs pulled back the tiny curtain today and revealed a device that's much different than its predecessor.

While the hardware has gotten a serious redesign (we'll get to that in a bit), it's the content experience that has received the most attention. The first major difference is that Apple TV is a rental-only device. You won't have the option to buy movies or TV shows and store them on your box. New movies —which will be available the day they hit DVD — will set you back $5, while TV show episodes have been knocked down to the magic number, $.99. According to Steve, however, all of the content will be in HD if possibly available (which we expect to be on par with the 720p HD that iTunes currently offers). Plus, during his demonstration, Steve ordered up an episode of Glee and the loading screen said the audio was Dolby Digital 5.1. 

Once you have purchased — sorry, rented — a movie or a TV show, you have 48 hours to watch it, like you do with normal iTunes rentals. If you're still not interested in spending the dough on temporary content, you can also stream stuff from Netflix and other web services. From the small look we got during the presentation, the Netflix streaming application actually looks very slick.
Things have also gotten better from a hardware standpoint. The box itself has gotten a serious blast from the shrink ray, making it roughly a quarter the size of its older brother. On the back, they've equipped it with an HDMI, optical audio out and an ethernet port to compliment its built-in WiFi connection. One of the cooler features comes from Apple's AirPlay, which allows you to stream video directly off of an iPad and onto an HDTV through the Apple TV box. However, while there is a certain "ooh and ahh" factor involved with that kind of streaming, it also acts as a reminder that your content is otherwise locked into the Apple TV. You can't go from Apple TV to an iPad, iPod or iPhone, which is less than ideal. 

It comes packaged with the ultra-sparse Apple remote, which should be adept at moving through the content selection screens and getting lost between couch cushions.

The player starts shipping in four weeks (pre-orders are up now) for $99, at which point we'll start finding out just how important media ownership is to consumers. Will people be more likely to spend $.99 on a rental than they were to spend $2.99 to own a single TV show episode? Only time will tell, but feel free to leave your thoughts in the comments.