More capable than ever before

The new Apple TV looks exactly like the previous version: same small black box. It’s got the same inputs and outputs on the back: AC power, HDMI output, micro-USB for service only, optical audio output, 10/100 Ethernet. It’s just as easy to set up: simply sign in to your Wi-Fi account and use the remote (or better yet, the free Remote app on an iPhone, iPad, or iPod touch) to navigate around.

You’ll find more content than ever before. We dinged the last Apple TV for offering iTunes Store rentals but not purchases. That’s changed: now you can purchase TV shows, plus rent and purchase movies. Movies you rent on the Apple TV can only be watched on that Apple TV. You have 30 days to start watching, and then once you begin a movie, 24 hours to finish it. Movies and TV shows you’ve previously purchased from iTunes are available via the cloud, so it no longer matters if you have a Mac constantly running iTunes to stream those from.

If you use iTunes Match ($24.99/year), your music collection is available in the Music tab. But if not, just turn on Home Sharing in iTunes on your Mac, and all your music, plus anything else in your iTunes library, is available in the Computers tab. And it’s a snap to stream music from an iOS device to the Apple TV via AirPlay.

Pretty much every set-top device has Netflix, but the Apple TV has the nicest Netflix interface we’ve seen, and you can even sign up for a Netflix trial or service plan right from the device. You can also access MLB.TV, NBA League Pass, and NHL Game Center subscriptions. For more free content, you can watch movie trailers, check out the WSJ Live ad-supported news channel, or browse YouTube, Vimeo, iTunes podcasts, and internet radio. Unfortunately, you can’t add more content channels like you can on the Roku box (the 1080p version is $79.99, www.roku.com), which also has HBO Go, Pandora, Hulu Plus, and Amazon Instant Video, among others.

The box will stream in photos from your iCloud Photo Stream and Flickr (it also supports MobileMe galleries, but those are going away soon). Photos look awesome on the big screen, you get 12 slideshow themes to choose from, and the slideshows double as screen savers. If you don’t want to look at your own pictures, Apple TV has some beautiful high-resolution National Geographic photos you can use as a screen saver too.

But so far everything we’ve talked about--abilities and recently refreshed interface--is available to owners of the previous Apple TV via a software update. The only reason for current owners to upgrade is 1080p streaming, which looks great and didn’t affect buffering times on our speedy 15Mbps cable internet. If you’re on a slow DSL connection, movies and even shows can take forever to be ready, sometimes longer than the video itself.

The bottom line. If you’ve been waiting for 1080p, now’s the time to get an Apple TV, especially if you’re heavily invested in iTunes content and/or you want to beam your media from your Mac to your TV. But if your big-screen TV tops out at 720p, and you just want to stream Netflix and other internet-based content, the 720p Roku 2 HD is only $59.99.