Anyone remember PixelVision, from the 80's? It was the camera that Fisher-Price came out with for kids. It made these blocky, black and white videos that were very hard to discern. I could swear that when YouTube videos are sent to my AppleTV box they go through a PixelVision process. I mean, most of the time I can guess at what is going ("I think that's a cup, and it looks like she, awwwwww.") I really, really hope the studios improve on the quality of video that I am getting today from AppleTV. Even the video podcasts that come from commercial properties, like the "Best Week Ever", look like they were encoded by a 3-year old coked-out on chocolate and Skittles. Can someone please let the few, non-striking employees left at the studios save AppleTV? The video can only get better.

Actually I think it was better at first. I had downloaded a couple years worth of a favorite TV show when that capability first came out. Was fairly good picture (this is just playing on my laptop, not hooked to HDTV or anything) for about a year. Then, suddenly in one of the OS X updates the shows, even the ones that had already been downloaded, took on the appearance you described. So it was not that the data was low-rez, but that they are no longer using the full rez available somehow. I read of numerous other complaints about this. As far as I know, this is one of those cases where Apple is pretending not to notice that its users exist. I've never even seen an acknowledgment of the issue from Apple.

Guess: lowering picture quality, even drastically was a step they were willing to take (especially after luring users into the platform) to get these studio deals.

The downloads I did are pretty much useless for watching other than when nothing else is available, so, guess what, as usually I'm tricked into buying the DVDs as well. Typical bait and switch from Hollywood, Apple, the usual suspects.

I stopped using iTunes over it. With Hollywood going down the tubes and the big format war going on, I expect to find more movies than I can watch in the $5 bin at Walmart.