As many Apple fanboys and other industry observers already know, Apple released a major overhaul of the embedded software on its Apple TV device. This coincided with the introduction of movie rentals through iTunes.

I’d first become familiar with Apple TV when I purchased one late last year. This new software makes Apple TV, in my opinion, almost a threat to TiVo and Amazon Unbox. I emphasized almost because it still lacks video recording capability. Still, it is a great upgrade, and hopefully the shape of things to come.

I decided to kick the tires on the movie rental feature last night and rented the HD version of Resident Evil: Extinction, which, as zombie movies go, is a lot of fun. The download took a while to complete, although I’m not sure how large a file transfer was involved because that part of the transaction is hidden. Like Amazon Unbox, once the transfer gets to a certain point, you can actually start watching the video while it completes the download in the background.

The video quality was excellent on my 32″ Vizio LCD HD TV. However, I found the sound levels be a little frustrating. During parts of the movie with simple character dialog, I had to crank the volume up, but when any action sequences came up, I had to dial down the volume. My Apple TV is connected to the TV via HDMI cable, and I’m running audio straight through the TV, and not into a receiver. Perhaps that is the issue.

At any rate, those of you with an Apple TV should upgrade it right away if you haven’t already. And those of you curious about the Apple TV, if you have a desire to bring the content stored in your iTunes library on your Mac or PC into your living room or bedroom, it’s a great way to do it.