Apple to allow 30 day movie rentals for $2.99 on iTunes

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Not sure but I'm guessing mp4 compression you can get a few. How many are you going to watch in 24h without wanting to stream? There is also the $329 160GB version of the AppleTV if you need the extra capacity.

EDIT: Looks like you can also pick up a refurbished 40GB AppleTV for $199 or the 160GB for $279

 

I'd say you could get anywhere from 3-4 HD Movies on a 40 GB harddrive. If compression is better for Apple TV than the Tivo HD or S3 then maybe more.

 

Apple TV is only 720P cabable, so that's it, but that would be OK with me. I would settle for Unbox to offer widescreen 480P and 720P!

 

480P would be adequate. 720P is where they need to be - good compromise between quality and download time. It's a shame that Amazon couldn't get out in front of this.

 

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My problem with Unbox is the compression. I watched Casino Royale, and during all of the fast motion scenes I could see major artifacts. It was so obvious that I thought it was a style they purposely used in the film. Later when I saw the DVD version I realized that it wasn't.