I've had an AppleTV for over a year and primarily use it for AirTunes playing back iTunes music (CDs ripped in Apple Lossless) on a remote computer via Airport Extreme. It has performed faultlessly at this, however I am very frustrated as Apple have not upgraded AirTunes to cope with streamed hi-res music.
I'd guess the operating system on AppleTV has the Mac core audio, and as the wireless streaming is 802.11n it should be able to handle 24/96 audio.
Apple seems only to care about improving the handling of video rather audio material.
I love my Apple TV. I bought a 40gb model from eBay for �130 then upgraded the hard disk to 160GB for another �40, this was a little tricky and involved the use of some clever partitioning software, so it's not for the feint hearted.
My Apple TV is connected to a 20" Sony TV in the kitchen. I don't think that the picture quality is good enough for it to go in the living room but it sure is good enough for the kids to watch their favourite movies on, i've ripped DVDs using the excellent Handbrake software and even though i've probably got 40 full length films stored, as well as music and photos, there's still room for plenty more, though the way hard disk prices are these days a 500gb upgrade wouldn't cost the earth.
The biggest use I have for the Apple TV though is playing music. I use my iPhone to control it remotely via wifi and it streams music to 3 rooms in the house where i've got Apple's neat little Airport Express units hooked up to speakers, and hifi's - I get the same music playing in sync throughout four rooms at once, it's amazing. I don't need to use the computer at all to play music, it all comes from the Apple TV.
Only had one problem with it and that was when I changed my computer. Moving to a new computer meant I had to sync my Apple TV all over again. I used an Ethernet cable otherwise it would have taken days over wifi!
It would be nice if Apple got together with Sky so it was possible to watch recorded programs from Sky plus/HD on the Apple TV via the Sky boxes Ethernet port, otherwise a great little box with ton of useful features.
This is a great product. I really only bought it to store my music on but find myself using it for much more. It will sync with your pc automatically as soon as you open itunes. One bit of advice is if you have a lot of music to sync from your computer then use an ethernet cable as it takes a long time to do it wirelessly (60 gigs took about 24 hours). If like me you don't have one that actually works its not a problem as you can stream music from the pc at the same time.
Downloading films is easy. My broadband is really slow so it took three hours to download enough of Ironman to start watching. The system knows when it's downloaded enough for you to start watching and not be interrupted before the end ie not finished the download. Thought this to be very handy. HD film quality is very good - not like Blu-Ray obviously but a good bit better than DVD.
It's worth getting an 8 gig Touch for using as a remote. Means you don't need the tv on to select music to play. Its connection with the Apple TV is very slick with no delay between song selection and playback at all. Very impressive. If you do use a tv for music Apple has made everything plasma friendly - nothing stays in the same place for more than a minute so no chance of screen burn or image retention.
Sound quality is excellent through a decent amp using HDMI. Not the best judge on this as I've never owned a good quality cd player but for what its worth its better than anything I've heard before.
All in all a very impressive product and worth every penny in my opinion.
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