So... anybody know for sure how AirPlay works?

Question

I've been wondering about this for a while. Seems like there are a couple of ways AirPlay might work:
1) iPhone/iPad device is playing video, you tell it to AirPlay the video on your Apple TV instead, it takes whatever it is playing back, runs it through an h.264 encoder on the iPhone/iPad and sends that to the Apple TV. Requires something like double the Wifi bandwidth than just playing the video on the iPhone/iPad. Also likely requires hardware support in the iPhone/iPad for h.264 encoding, something that isn't present on the Mac.
2) iPhone/iPad device is playing video, you tell it to AirPlay the video on your Apple TV, the Apple TV takes over and requests the video directly from the web site, and your iPhone/iPad just becomes a controller for the video, just sending simple commands to the Apple TV (Play, Rewind, Jump to position X). Requires only the same wifi bandwidth, not 2X. The video could also be played back at a higher resolution than it might have been on your iPhone. However, this method wouldn't support anything that the Apple TV can't handle. So forget playing back games via AirPlay. Only audio and video compatible iwth the Apple TV. VLC couldn't add an AirPlay either.
Anybody know?

Answer 1

My understanding is that there are two components to Airplay and they are Audio and Video.
In the case of a Home Shared iTunes library when running either the iPod or Video applications that come standard with the device these application only allow you to Airplay the Audio in other words you can select speakers other than those on the device. My guess is that Apple never saw Airplay Video as a requirement given that an AppleTV '2nd Generation' can access a shared iTunes Library in its own right.
However if the media has been downloaded aka Sync'd from the iTunes Library to the device then in these circumstances Airplay Video is supported and you can select the AppleTV and play the media. So in summary it is the Video that is accessed through the Home Share arrangements that cannot be Airplayed to an AppleTV. I hope that makes sense.
In the case of a third party application like the ABC's iView 'available from the Apps Store' this allows you to Airplay Video to a AppleTV HDMI connected to a compatible HD TV. This type of connectivity requires a High Broadband connection like ADSL/2 that will run at a minumum of at least 1.1 Mbps '1026Kbps' for best results. These resources are streamed from the Suppliers Server in this case the 'ABC' and not actually downloaded and saved to your Hard Disc.
Another third party program that is also available through the Apps Store is Air Video which allows you to Airplay Videos to an AppleTV which are located in your iTunes Library.
In summary my guess is that Apple did not see the value in having Airplay supporting iTunes Videos given that you can access these resources directly
on the AppleTV.
Ant..