Long referred to as a hobby during Apple keynotes, Apple TV has evolved into one of the star peripherals of the iOS ecosystem. And no wonder--this slim 4-inch box turns your humble HDTV into a networked entertainment powerhouse. Apple TV’s HDMI and optical audio ports connect to your home theater, and it connects to your network via 802.11n Wi-Fi or 100Base-T Ethernet. Once you’re plugged in, you can buy or rent movies at up to 1080p, or buy TV shows at the same resolution, from iTunes. Both come with stereo or Dolby 5.1 sound. Movie rentals must be watched on the Apple TV, but purchases are synced to iCloud to be downloaded and watched on other devices. You can also download directly to your Mac’s iTunes library for local backup.

But Apple TV is more than just a pipe to Apple’s servers. It can also beam your Photo Stream pics and iTunes Match music right into your living room. Closer to home, you can use AirPlay to wirelessly stream videos, photos, and music from your iOS devices to Apple TV--even mirror their displays, with an iPhone 4S and iPad 2. Just tap the video’s AirPlay icon and select your Apple TV. It’s great for starting a movie on the go, then finishing it at home with your hands free for a bowl of popcorn. You can also stream video, music, and podcasts you have stored in iTunes on your Mac to the Apple TV over the local network.

If that’s not quite enough entertainment, Apple TV lets Netflix subscribers access their entire streaming library at the same HD resolution as iTunes videos (and if you’re a Netflix newb, you can sign up for the service right from your couch). Apple has sports fans covered with live HD games via MLB.tv, NBA League Pass, and NHL GameCenter LIVE subscriptions. Between all those movies and games, you can also use Apple TV to browse new podcasts from the iTunes Store, internet radio streams, YouTube, Vimeo, and Flickr. You can even watch Wall Street Journal Live, if kicking back to business analysis is your idea of a good time.

As good as Cupertino’s streaming star is, sometimes even top talent can use a makeover. You can extend Apple TV’s multimedia powers with software like aTV Flash ($29.95, www.firecore.com/atvflash-black). It lets your Apple TV play VIDEO_TS files ripped from DVDs (complete with all menus, subtitles, and extras) and non-iTunes file formats like MKV and AVI. You can even update Twitter, surf the web, view RSS feeds and more, all streaming from your Mac, PC, or NAS to the big screen. Best of all, you can revert to the factory-default Apple TV software at any time. (At press time, aTV Flash worked only on the first-gen silver Apple TV and the second-gen black 720p Apple TV, not the brand-new third-gen black 1080p model. But the developers hope to have an update out soon.) If you stick with the new options, Apple TV’s standard features remain untouched and fully functional first you’ll have to jailbreak your Apple TV with free software called Seas0nPass, and for that you’ll need a micro USB cable and your Apple TV’s original silver remote (they connect the Apple TV to your Mac and send it commands during the jailbreak, respectively). Once the process is finished, you can apply the aTV Flash software over your wireless network.

Just remember that you’re hacking the Apple TV to work in a way Apple never intended. Future software updates from Cupertino may cause issues, so you’ll have to wait until the aTV Flash software is updated before applying them. Depending on your media needs, that extra work may well be a fair trade-off for all the new features you’ll get from Apple’s little black box.