Roku's fourth generation streaming player, the curiously named Roku 2, is the company's best yet, an excellent and inexpensive solution for accessing valuable online services like Netflix, Amazon Instant Video, and Hulu Plus from the living room. And while it may seem especially interesting for those who understandably wish to avoid the Apple side of the fence, the Roku devices--there are three versions--are so inexpensive that even die-hard Apple fans might want to take a look.

As with last year's redesigned streaming players, which were actually the third generation Roku players, this year's evolutionary update provides three player models, two of which are truly interesting. The entry level Roku 2 HD costs $60 and provides access to all of the online services, built-in Wi-Fi, and 720p HD output. Step up to the Roku 2 XD for $80 and you gain 1080p playback. And if you go for the most "expensive" of the three, the $100 Roku 2 XS, you get a different (and video game-capable) remote, a free copy of the popular Angry Birds game, an Ethernet port (for a more stable wired network connection), and a USB port for local playback of USB-based content.

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I received a Roku 2 XS, but since it's a true superset of the other two models, some general comments are in order here. First, the devices are all physically identical, and look very much like Apple's latest Apple TV, sort of a squared off hockey puck design, so that doesn't need to factor into the buying decision. Second, I feel that virtually any reader will want the 1080p playback, so I recommend going with the $80 Roku 2 XD or $100 Roku 2 XS, and not the low-end version. Third, looking at the unique features available on the XS, I'm not sure it's enough of a difference, unless that Ethernet port is truly valuable to you. And as you'll see in a moment, the unique, new XS remote is nice, but has a fatal flaw I find irritating.

Compared to an Apple TV, which limits you to Apple's iTunes-based services and a handful of useful third party services--the only truly universal one being Netflix--the Roku 2 is the model of openness and offers access to a much better and broader variety of services. These include:

Netflix. While the Netflix streaming TV show and movie service is about as ubiquitous as online services can be, the Roku version is better than most because, unlike with the Apple TV, Xbox 360, or most set-top boxes and TVs, it actually offers support for soft captioning (or what Netflix calls subtitles). This is a big deal in my house, where the Roku box is the only devices out of several that actually supports this feature. For us, this is reason enough to own a Roku 2. The Netflix streaming service is $8 a month.

Amazon Instant Video. An interesting combination of Apple's iTunes Store (when used via the Apple TV) and Netflix, Amazon Instant Video is maturing into what I feel will be the go-to online digital video service in the years ahead. Like iTunes, it offers rentable and purchasable TV shows and movies, often with HD options, but unlike iTunes, you also gain forever streaming access to everything you've purchased in the past. And as with Netflix, Amazon offers a free TV show and movie streaming service, called Prime Instant Videos. Currently, this service is not as fully populated with content as is Netflix, but that's changing almost weekly. And as important, the service is free--yes, free--to anyone who is also utilizing Amazon's excellent Prime Shipping option (which I am); this service costs $80 a year and also provides free, two-day shipping on most physical items purchased from Amazon.com.

Hulu Plus. While the free Hulu and paid Hulu Plus services have never taken off as successful as, say, Netflix, this service does offer a better selection of new TV shows than does Netflix and is reasonably priced ($8 a month) assuming that's what you're looking for.

TWiT. Leo Laporte's TWiT network provides the most popular tech and science podcasts on earth, including my own Windows Weekly. (OK, so I'm a bit biased on this one.)

Pandora. The most popular online radio service is available in free and paid ($60 per year) versions, the latter of which provides better quality music streaming, no advertisements, and other features.

Picasa. Google's excellent but underappreciated photo management and cloud storage service is available in free and paid (various yearly prices) versions. I happen to use and recommend this service, though others like Flickr appear to be much more popular with users. (Flickr is available as well, of course.)

MLB.TV. Major League Baseball's official streaming service provides out of market regular season baseball games live or on-demand. There are two versions of the service, MLB.TV ($60 a year or $20 a month) and MLB.TV Premium ($80 a year or $25 a month), the latter of which adds a choice of home and away broadcasts, live game DVR controls, and simultaneous multi-game viewing.

But wait, there's more. Those are the channels I see on my own Roku 2. Dive into the on-device Channel Store and there are many more, including (but not limited to) Crackle (movies on demand), Facebook Photos & Videos, AOL HD, Revision 3 (podcasts), Flixster (HD movie trailers), CNET (technology shows and podcasts), Livestation (international news), and many, many more.

OK, now all of this stuff is available on any Roku 2 player. And while I've discounted the low-end version, it may be worth further examining the differences between the mid-level Roku 2 XD and the high-end Roku 2 XS.

Aside from the Ethernet port--which may or may not be a must-have, depending on your needs--the XS offers two key differences over the XD. The XS is set up for video gaming. And it includes a USB port for local content playback. And those features break down like so:

Video games. The Roku 2 XS has a GPU for video game functionality a new API for developers that would like to take advantage of this. As a proof of concept, sort of, the XS includes a great version of Angry Birds, which looks awesome in HD and works surprisingly well with the bundled remote. 

That said, the remote is otherwise troublesome, because the OK button isn't in the center of the d-pad where it belongs. Instead, it's below the d-pad, which makes entering user names and passwords monotonous and error-prone. Last year's Roku remote was much better in this regard, as is this year's HD and XD remote, both of which put the OK button where it should be.

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The Roku 2 HD and XD remote (left) and XS remote (right).

Aside from Angry Birds, Roku offers a decidedly weak selection of card and dice games (yes, really) through its store. Presumably, other, higher quality games will be made available via the Channel Store over time. But I don't see this as a huge selling point.

USB. If you've got a hard drive or USB memory stick full of content you'd like to play back from the Roku 2, the XS includes a USB port for doing just that. As with other set top boxes, the interface is clumsy and slow, but at least it does work with NTFS formatted disks, which has historically been problematic. I think the best I can say here is that, yes, it does work. But it's slow, especially when navigating in folders with tons of files, and there's not a lot in the way of playback controls. It doesn't work with video files that have soft captions (no surprise there) and can't handle other advanced functionality.

What all Roku devices are still missing, incidentally, and I have to say I find this curious, is network-based content playback. All of my digital photos, home movies, DVD rips, and music are on a PC or home server, and what I'd like to be able to do is browse the network, find that content, and play it back on the Roku 2. The WDTV Live does this. The Xbox 360 does too. (Even the Apple TV does this, sort of. But iTunes needs to be running on a logged-in PC for this to work, and both the Apple TV and iTunes instance need to be utilizing the same Apple ID for home network sharing.) But here we are in 2011 and Roku is still ignoring this one need. It's curious, because the devices are otherwise near perfect.

Final thoughts

Even if that latter bit of functionality is crucial to you, you may find yourself wanting a Roku 2. And that's because it handles all of the most popular online services so well. This is the best alternative to the Apple TV I've seen so far and is in fact superior to the Apple TV for most PC users simply because of the breadth and depth of services choices. Also, the Roku 2 is cheap, tiny, silent, and has a wonderfully simple user interface. What's not to like?

Highly recommended.