Considering Apple TV, but...

When I saw it on display at the Apple store, all the content being shown on the demo set up seemed fuzzy and low resolution.
You would think they'd show the best possible samples, and if that's the best I can expect, I'll skip it. My DVD player gives me a good picture, and the few digital broadcast stations I can pull in with a regular "rabbit ear" antenna are great.
A store employee said they were showing some older content that was meant for iPods and the newer stuff could be downloaded at higher resolution. But I don't know if he knew what he was talking about.
I presently don't have cable or a dish– I'm waiting till Fios is available in my neighborhood, and was thinking that Apple TV would be a good interim solution.
How does Apple TV compare to conventional DVD and cable picture quality?

You don't have to purchase any content at all from iTunes you can rip DVDs that you purchase and that way they are yours and have no DRM associated with them and you can use them anywhere with any product. if you rip from a blueRay disc you'd get blueRay quality. the quality of the picture completely depends on what you start with.
you can get better than DVD quality from a DVD rip if you use the right tools. I use a free product called Handbrake and if you use a 2 pass encode it ends up looking better than the DVD i ripped it from. It also puts in all the chapters and you can take the 5.1 surround sound and encode in ProLogic II so that you get 5.1 surround sound out of the AppleTV.
you can access your music and everything you have in iTunes through the AppleTV and more actually if you are on a Mac.. you can access your iPhoto albums as well. and you don't actually have to load anything on to the AppleTV you can stream all you content from your computer to the AppleTV. Why anyone would bother with the 160G model i don't know.. even 40gigs is probably overkill. just purchase some large cheap hard drives and attach them to your computer and stream content to the AppleTV... that's definitely the way to go... way less expensive and versatile.

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