Oh, Apple TV, I loved you so. But what man would want you now?

Apple's newly redesigned and somewhat neutered Apple TV represents a major retreat on the part of the normally infallible Cupertino super power. Whereas the original version was a slightly detuned Mac, the new only is barely more than a dumb terminal, with just a handful of networking and display connections. Why, Apple, why?

OK, it's not that bad. But as is the case with this year's iPod nano, the new version of the Apple TV isn't a direct successor to its predecessor. It is, instead, something a bit different. A bit less.

This type of redefinition has its benefits, of course. The new Apple TV is significantly simpler than the old version, though I should point out that the old version wasn't exactly difficult to use. It's also quite a bit less expensive and on par with the Roku Player and WD TV devices with which it now competes.

So the real question here isn't, how does the Apple TV stack up against its predecessor. After all, barely anyone ever bought the thing. No, the new Apple TV competes with the suddenly swelling ranks of tiny, silent, digital media-oriented set top boxes like those mentioned above, as well as some other living room solutions, like the more powerful Xbox 360. So how does it compare to its real world competition?

Pretty darned well, actually.

The device itself is small, comically so, almost too small. It's one-quarter the size of the old Apple TV, but that won't mean much to most people. It's even smaller than the Roku Player, which seemed diminutive when it arrived but is now outclassed in this regard. Like the new Xbox 360, and most of the competition, the Apple TV is now black as well, which is perhaps more living room friendly than silver and white.

Inside, you'll find the now-ubiquitous Apple A4 processor, 256 MB of RAM, and, curiously, 8 GB of storage, which I assume is used for caching only since the new Apple TV cannot be synced with content as before but instead streams everything, either over the Internet (from the iTunes Store) or over the home network (to your PCs and/or Macs). Still, that's a lot of storage. Maybe Apple sees an apps capability in the future?

Whatever the point of the storage is, the Apple TV performs much better than its closest competitor, the Roku Player, which is one of many things you should consider when adopting such a device. That said, the Apple TV is of course Apple-centric, with some Netflix thrown in, while the Roku Player offers access to a ton of services, as well as Netflix, and, soon, to local hard drive-based media playback too. That said, iTunes + Netflix is going to do it for a lot of people.

The software interface is roughly comparable to last year's update, Apple TV 3.0, but simpler because it does less. It features the same Media Center knockoff we've come to know and even love, with five main menu items only, Movies, TV Shows, Internet, Computers and Settings.

The first two, as you'd expect, connect to Apple's voluminous online store, though this time around your only option is to rent, even for TV shows (which were never offered for rent before this; consider it a one-time play). Movies provides Top Movies, Genres, Search, and In Theaters choices, and new films are generally $5 to rent in HD, while older films are $4 for the HD version. I assume there are SD (standard definition)-only movies in there somewhere but I haven't seen one yet.

On the TV side, things have gone downhill pretty dramatically because Apple's television partners are pretty evenly split on whether this new scheme makes any sense. So instead of the crazy number of networks that are available through the PC-based iTunes Store for sale, on the Apple TV you can only rent, and then only from a handful of networks: 20th Century Fox (which includes FOX), ABC (which includes ABC Family, ABC News, Disney Channel, and Disney XD) and BBC (which includes BBC America and BBC Earth). And that's it.

If you can find a show you want, they're just 99 cents to rent, and that's true for new shows as well as older shows (like "The X-Files") that are only available in SD. Simpler, yes. But also limited.

The quality of rented TV shows and movies is generally excellent, from what I can tell. There's been some talk about the downgrade from 1080i to 720p on the new Apple TV, but the picture quality and performance seems great, over either Wi-Fi (I tested with 802.11g) or Ethernet.

In the Internet category, you get Netflix, which is new to this Apple TV version, YouTube, Podcasts (which used to be a separate main-level menu item), MobileMe, Flickr, and (Internet) Radio. Each behaves a bit differently.

Netflix works a bit differently than it does on other devices, and Instant Queue isn't the default, top choice for some reason. Instead, you get Suggestions For You, Recently Watched, Movie Genres, TV Genres, Instant Queue, and Search. On the Xbox 360 and the Roku Player, Netflix provides a large number of related dynamic queues that are based on the content you've watched; here these can be found under Suggestions For You. But the genre sections are somewhat unique to Apple TV as is, for now anyway, search.

YouTube seems to work largely as before. Podcasts, of course, is different because you can't subscribe to anything from Apple TV, so what you're left with is a browse and search interface, and of course playback. And if you do find something you like--you know, like Windows Weekly, for example--you can add it to a Favorites, so you can access it from the main Podcasts menu. (You can of course subscribe to podcasts from iTunes on your PC and access them via Apple TV that way as well; see below.)

MobileMe has evolved from being completely useless and expensive to being semi-useful and expensive, but on the Apple TV, it's there only for online photo galleries. And not just your online photo galleries, anyone's. All you need is their MobileMe account name and, if they have a valid account with some (public) online photos, you're in. There's no logging in, just supply the account name. Flickr works the same way, with account names and public albums.

Connecting to iTunes-based PCs (and Macs) has changed, but Apple still hasn't overcome the most unsophisticated part of this whole set up, which is that you must be logged on to and running iTunes on any PCs (or Macs) with which you wish to connect. So if your whole music collection is on your main desktop PC, that computer must be on, you must be logged in, and iTunes must be running. Come on, Apple. You make a UNIX-based OS. Surely you've heard of background processes.

The change, alas, is only in the details. In the past, you could either sync an iTunes library to an Apple TV or stream content to the device (or both). Now, you can only stream, and iTunes no longer "sees" the Apple TV on the network. Instead, you must enable the Home Sharing feature that Apple debuted in iTunes 9 last year; this connects iTunes libraries, and now Apple TVs, together, using your iTunes Store account as the key. (In Apple's world, the store is the center of everything, so this makes sense.) It's kind of like the Windows 7 HomeGroup, but limited to iTunes.

All told, the new Apple TV is well poised to compete with the competition of today--boxes that, for the most part, are all about streaming content, not syncing and local storage--though it is quite a bit less interesting than the original. But my opinions of products often veer wildly with what's popular, so there's no surprise there (or accounting for taste). Even in this scaled down version, however, the Apple TV is still a great little solution, and now that the price is right, it's hard to imagine any of these competitors really beating Apple at this game.

That said, the Apple TV is, of course, not Windows friendly, and if you're looking for a way out of Apple's ecosystem lock-in, this won't be for you. I've got a number of other devices to look at before any kind of true comparison can occur. But for now, the Apple TV is a great little solution, assuming you're OK with the Apple stuff.