With the introduction of the fourth-gen iPod Touch and a new $99 set-top box, Apple is offering TV show rentals for the first time. At the time of this review, rental content is limited to a selection of shows from Fox and ABC, but all content is priced at an attractive 99 cents per episode. Rented TV shows have a built-in expiration of 48 hours, once a show playback has started, or 30 days total, even if the show is never played. By comparison, rented movies have a stricter rental window of 24 hours once playback is initiated, or 30 days if unwatched.

As far as music and video services beyond iTunes are concerned, the iPod Touch is much more flexible than iPods in the past. Any unprotected MP3, AAC, Apple Lossless, AIFF, or WAV audio file can be transferred to the Touch without hassle, and DRM-protected Audible audiobook files will work, as well. If you have a collection filled with unprotected WMA music files, Apple's iTunes software can take care of transcoding them into a compatible format. If you're dealing with a bunch of DRM-protected WMA files (or more-boutique files, such as Ogg Vorbis or FLAC), you're just out of luck. that said, if your protected WMA files are the result of a PC-only music subscription service, such as Rhapsody or Napster, it is now possible to stream and sometimes store these files using compatible apps.

The same situation is more or less true for video compatibility as well. A handful of popular unprotected video types, such as H.264 and MPEG-4, are supported in a variety of versions (MOV, MP4, M4V) and resolutions. Some files types, such as AVI, DivX, and XviD, can be made compatible using third-party apps. And some video services, such as YouTube, Netflix, and others, can be used to stream content by way of apps or the included Safari Web browser. that said, if you're trying to sync a DRM-protected WMA file you downloaded from Amazon or CinemaNow, you're probably out of luck.

FaceTime
The first icon you'll see on the main menu of the iPod Touch is a new app labeled FaceTime. It's a feature that has made its way over from the iPhone that allows you to place or receive free, real-time video calls over Wi-Fi. FaceTime calls can work from iPhone to iPhone, Touch to Touch, or between Touch and iPhone owners.

FaceTime calls on the iPod Touch perform just as well as they do on the iPhone, but the mechanics are a little different. Because iPods don't have phone numbers attached to them, iPod Touch users need to set up their account on the device and associate it with an e-mail address. A contact list appears within FaceTime that you can add to and edit. to make an outgoing FaceTime call on an iPod Touch, you pick a contact from your list and select whether to place the call to the contact's phone number or e-mail address. Provided that the person receiving the call has a compatible iPhone or a fourth-gen iPod Touch connected to Wi-Fi, the call should go through without a hitch.

Once connected, the front-facing camera kicks in and you can both see and hear the person you're calling, and vice versa. As on the iPhone 4, there's an onscreen button for switching between rear camera and front-facing camera. you can also tap the home button to disable the video feed and multitask on the iPod Touch while maintaining the voice call.

All in all, FaceTime is a cool feature. During our limited initial tests, we noticed very little latency in the FaceTime audio and video stream. The integrated microphone and speaker on the fourth-gen Touch make it possible to speak and hear your conversations without having to plug in a headset or mic adapter. The feature does work with headphones, however. If you plug in the basic earbuds included with the Touch, audio is routed to the headphones and the internal speaker gets disabled, but the microphone still works. If you plug in a headset with a compatible microphone (such as Apple's in-ear headphones), then the headset will handle everything. unfortunately, as with the iPhone, wireless Bluetooth headsets will not work with FaceTime calls. We're not complaining, though, since the feature is free, well-executed, and 99 percent awesome.

iOS
So far we've been focusing this review mostly on the improvements Apple has made to the hardware and capabilities of the fourth-generation iPod Touch. The elephant in the room is all of the existing and continually improving capabilities of Apple's iOS platform (formerly known as iPhone OS).

Core features, such as e-mail, the Safari Web browser, Maps, the YouTube viewer, photos, calendar, and notes, are still the heart of the device. The installed features are just the tip of the iceberg when it comes to the available capabilities. an iTunes App Store, accessible from the computer or directly from the iPod Touch, lets you download and install thousands of applications, including Internet radio players, games, voice recorders, social-networking tools, and much more.

The recent updates made in iOS4, such as home screen folders, threaded e-mails, and app multitasking, address most of the criticisms we've made of the device over the years. for more information on the updated capabilities of Apple's iOS, read CNET's full review of Apple iOS 4.

Performance
Apple rates the battery life of the fourth-generation iPod touch at 40 hours of audio playback or 7 hours of video, which is an improvement over the previous generation's estimates of 30 hours of audio playback and 6 hours of video. We'll publish our official CNET test results once they're available. If history is any indication, though, our tests have shown that Apple has underestimated battery performance for the past three generations of iPod Touch.

That said, as capabilities and uses of the iPod Touch continue to branch out into gaming and communication, audio and video performance may not be the best measure of real-world battery endurance. in our experience, 3D gaming tends to drain battery life the fastest. taking measures such as disabling audio EQ, Bluetooth, and Wi-Fi can help to save battery life, as will lowering screen brightness.

Sound quality for the latest iPod Touch is just fine, and right in line with previous models. Apple could always do better on this front by offering custom EQ or a suite of audio enhancement settings beyond the stock EQ presets, but we're not holding our breath. Provided that you upgrade your headphones from the universally loathed stock white earbuds that come included, you should be able to coax a great audio experience from the iPod Touch.

As of iOS 4.1, the iPod Touch now adds full AVRCP support to its existing Bluetooth 2.1 feature, allowing users to pause and skip songs or adjust volume via Bluetooth remote controls (when available). Pairing the iPod Touch with Bluetooth accessories such as stereo headsets, speaker systems, or car stereos is quite simple, and a record of previously paired devices is stored in the iPod's Settings menu. The audio quality and wireless range (about 30 feet) using Bluetooth is about what you'd expect from most portable Bluetooth devices, and we're happy to see that the audio from video playback and apps are transmitted over Bluetooth just as easily as music playback. It's worth noting, though, that keeping Bluetooth active on the iPod Touch will take a toll on its battery life.

Video quality on Apple's Retina display is outstanding. Throw on some rented TV shows, a feature film, or a high-end video game, and the experience is so fluid and crisp, it's hard to believe. Last year, we were a little iffy recommending the iPod Touch video experience over the OLED screen loveliness of the Microsoft Zune HD. At this point, though, we think it's safe to say that anyone who can meet or beat Apple's current display technology will still have a tough time matching Apple on the kind of graphically rich video and gaming content that can make those pixels sing.

The iTunes factor
If you're considering buying an iPod for the first time, consider that Apple's iTunes software is a required installation for your computer. The software is free and available for both Mac and Windows computers, and we encourage potential iPod owners to become familiar with the software ahead of time to ensure that it works well for you and your computer. to learn more about iTunes, we recommend checking out Download.com's latest review and any user feedback associated with it.

Final thoughts
The Apple iPod Touch is arguably the last shot fired in the war of portable media players. There's simply no catching up to it in terms of quality and capabilities. in fact, we sometimes joke around at CNET about how many product categories have been unintentionally maimed by the Touch, including Internet radios, PDAs, portable gaming devices, and GPS receivers.

In fact, as the scope and power of the Touch's capabilities continues to expand, it may have a role yet to play in the war of tablet computers. Apple already has an early lead in this space with the iPad, which shares nearly all of the capabilities of the Touch, only on a considerably larger screen. to not consider the Touch as a tablet computer based on its smaller screen size seems a little arbitrary, especially as Android-based contenders from Dell, Archos, Samsung, and others are exploring similar forms.

Time will tell how consumers will define the nascent tablet computer category, but don't be surprised if the iPod Touch starts to find itself taking on new rivals beyond the shrinking world of portable media players.

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