System has entertaining features, but it hasn't yet found its real purpose in a digital life.

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Apple TV should appeal to someone like me: with two young kids, a spouse and limited time, I now have a way to rent movies from a device that’s attached to a high-definition television set. That should be just the ticket, right?

But I confess I’m not overwhelmed by Apple TV’s latest revision, even though it has a host of entertaining features. Certainly, some lack of enthusiasm comes from the Hollywood-mandated 24 hours in which you can watch a film from start to finish; competitors to Apple TV suffer the same odd limit.

Apple TV lacks any killer feature that makes it worth putting in the TV cabinet, and its buy-our-stuff orientation and focus on HD rentals leaves me cold, partly because of the current poor selection of movies available.

And despite Apple’s usual polish and its universe of devices that can play purchased or rented content, equipment from competitors may have more to offer: games, TV recording or more movies — take your pick.

Apple TV “Take 2,” as company head Steve Jobs likes to call it, involves a major software overhaul. The hardware — a square-footprint, compact appliance — remains similar to the original version. (Owners of the Apple TV before a software update released a few weeks ago can simply upgrade their units at no cost.)

The Apple TV is a networked multimedia device that sports a 40 GB ($229) or 160 GB ($329) hard drive; can play content purchased and downloaded directly to its drive; synchronize iTunes and photo content from one Mac or Windows system on a local network; and stream media from up to five more iTunes libraries on the local network.

The original Apple TV was just a conduit: the media streamed or synced to it was then viewed on an appropriate television set. (Some older TVs require a converter to accept a “composite” or single-plug video signal; the folks at SVideo offer one starting at $139:

The new Apple TV has two significant changes: First, you can buy stuff on it; second, you can rent movies, including a limited selection of HD versions, and watch them without involving a computer. Content you buy — but not content you rent — can be copied back to the single networked Mac or Windows system you’ve chosen to synchronize items with.

The new software also lets you pull in and view photos stored on Yahoo’s Flickr service and Mac galleries. You can also subscribe to podcasts, and watch YouTube videos. Each of the media options is listed in a streamlined and redesigned menu. The left pane shows Movies, TV Shows, Music, Podcasts, Photos, YouTube and Settings; a right pane changes contextually, based on the main category you’ve chosen.

It’s an easy way to get to everything you own and anything you might want to buy. But “buy” is the operative word here.

The menu organization shows that the Apple TV is all about Apple, not about you. Instead of organizing all your media in one place, as iTunes does in the top left of its sidebar, each of the four main media categories put what you can buy first, and your own media at the bottom.

For instance, with TV Shows selected you see Favorites, Top TV Shows, Genres, TV Networks, Search and My TV Shows. When you’re navigating to watch a show, wouldn’t you rather see what you currently have available to watch?

Easy set up

Setting up an Apple TV is as typically easy as most Apple hardware. It’s a networked device, and can be connected either via Ethernet or Wi-Fi, with support for the fastest 802.11n standard built in to Apple gateways and computers. Setting up iTunes to work with Apple TV involves a nifty mechanism: The Apple TV displays a five-digit code in large type. You select the Apple TV in iTunes — it shows up in the left sidebar — and then enter that code. Like a networked iPod, all the content available in each copy of iTunes connected to the Apple TV can be played and viewed.

The Front Row remote control is identical to that used with Apple’s computers. A menu button is below a four-position dial (up/down, right/left) with a play/pause/select button in its middle. (It’s so identical that I kept triggering other Macs via the infrared control. A well-hidden setting in the Security preferences pane in Leopard lets you disable remote access via remote control.)

Watching movies

After setting up the network, and entering my iTunes Store account information, I was able to browse through movies, watch previews and make purchases and rentals.

Rentals of standard-definition (SD) movies can start almost immediately if you have a reasonably fast connection. My 3 Mbps DSL seemed to qualify. With SD, an hour is roughly 800 MB; HD is about three times as big.

On a 3 Mbps DSL, assuming about 80 percent real-world performance, a two-hour SD movie would take about 90 minutes to download. In testing, a two-hour HD movie took several hours; I let it run overnight.

Those with fast DSL or cable modems will be able to download an HD movie faster than they watch it, and can start watching a movie shortly after purchase.

While watching an HD movie — “Superbad,” which looked super-vivid and super-crisp in HD — the Apple TV once showed a glitch resulting from the encryption that studios require. A technology called HDCP has to engage between the Apple TV and an HDTV before the movie plays. Once, in navigating away from and back to the film, the screen went blank momentarily as it switched encryption on, and the movie played as a mostly white screen with audio. Navigating away and back resolved the glitch.

The Apple TV also handled its other features quite well. I hooked in to Flickr and looked at recent photos taken by me and friends; watched some popular YouTube videos; and listened to Glenn Gould from my music library. The controls for music seem somewhat horsy and primitive; they’re identical to what you find on an iPod, but having truncated titles and limited track information seems silly where more detail could be shown.

Apple’s rental system

Apple’s big push with the new Apple TV centers on movie rentals. Apple signed the big five studios and several independent moviemakers to have the greatest possible selection both for this device and within iTunes.

Apple’s rental system falls short in a number of different ways, some having to do with constraints placed upon them — not that that’s stopped Apple from charting its own course before.

For starters, all of Apple’s competitors for stand-alone movie boxes, such as Vudu, have thousands of titles. Apple’s Jobs promised 1,000 rental movies by the end of February, but the count is less than 400 in early March. (Microsoft has a small movie count for its Xbox Live service, but the Xbox 360 is compatible at no extra cost with CinemaNow, which has thousands of films for rent or purchase.) Apple will certainly rectify these numbers over time.

A bigger concern has to do with limits on portability. This is a tough thing to criticize, because Apple is the only firm that has an ecosystem for moving rented movies around; its closest competitors that support portable devices allow only purchased movies and TV shows to play on multiple devices.

Still, Apple prides itself on the seamless movement of media, and that makes it particularly odd that it made the choices they did.

If you buy music, movies or videos on an Apple TV, you can sync those items back to iTunes on a networked computer, and then, in turn, move those items onto other computers or iPods and iPhones.

If you rent a movie on the Apple TV, however, it can’t be moved to watch elsewhere. But if you rent the same movie via iTunes it’s portable, even to an Apple TV. Confusing? You bet. (Even more confusing, if you own a pre-2007 video iPod, you can download movies you buy from the iTunes Store, but not movies you rent. Apple offers no explanation.)

A more general complaint has to do with the rental period. Apple, like most of its competitors, requires that you start watching a rented movie within 30 days of download and complete watching it within a 24-hour period. Apple did throw in a nice bone: if you’re watching a film when the 24-hour period ends, or you’ve paused before that period and have left the movie paused on an Apple TV — which has no off button — you can continue to watch until the film ends.

Other options out there

As a parent of two, I cannot watch a film within a 24-hour period. It’s been proved time and again. My wife, on hearing this limit, said, “We’re not their demographic.”

But even if Apple were able to pry the fingers of the movie industry off this particular setting, which doesn’t seem to benefit the studios at all, the Apple TV still seems in search of a purpose.

If you like movies that much, Vudu, with its greater selection for both renting and buying, might be a smarter buy. If you play games, the Xbox 360 is a better match with a CinemaNow account.

If you record television, a TiVo Series 3 coupled with a rented CableCard decoder from our local cable firm (for recording premium cable channels) and Amazon Unbox might be the smarter investment.

Apple’s improvements to Apple TV are welcome, and the device is as stylish and functional as one hopes from the company, but it hasn’t yet found its real purpose in a digital life.

Glenn Fleishman writes the Practical Mac column in Personal Technology.